Court Opinion

ID: 4425632
Source: CourtListenerOpinion
Date Created: 2019-08-14 20:02:29.437784+00
Date Added: 2024-06-11T14:52:54.232178
License: Public Domain

Filed 8/14/19
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

ALICE HERSEY,                                      B287896

       Plaintiff and Appellant,                    (Los Angeles County
                                                   Super. Ct. No. BC543102)
       v.

STEPHEN VOPAVA,

       Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of
Los Angeles County, Ross Klein, Judge. Reversed and remanded.
     Law Office of Jonathan D. Winters and Jonathan D.
Winters for Plaintiff and Appellant.
     The Safarian Firm, Harry A. Safarian and Christina S.
Karayan for Defendant and Respondent.
                       _________________________
        Under Code of Civil Procedure section 998,1 a litigant who
refuses an offer to compromise and then obtains a judgment
lower than the offer is tasked with paying the offeror’s costs
incurred from the date of the rejected offer. Here respondent
landlord made two different offers to compromise his tenant’s
civil complaint under section 998. Both were rejected. This
appeal primarily presents a question of costs, that is, how to
determine the correct “net” judgment in favor of appellant tenant
and, thereafter, whether the judgment is more favorable than the
two section 998 offers.
        A landlord-tenant dispute over the habitability of a tenant’s
apartment generated two offers by landlord Stephen Vopava
(respondent), the first for $10,000 and the second for $20,001.
Tenant Alice Hersey (appellant) rejected both. After a bench
trial, the court awarded Hersey $7,438 in damages. The court
subsequently found the section 998 offers were reasonable and
made in good faith; declared respondent to be the prevailing
party under section 998; and awarded respondent attorney fees
pursuant to the rental agreement and costs. Appellant appeals
from this post-judgment order awarding costs and attorney fees.
        Appellant contends the trial court erred in failing to add
her pre-offer costs to the damages award for purposes of
determining whether she received a judgment more favorable
than the offers within the meaning of section 998. We agree,
reverse the trial court’s amended judgment incorporating the
order, and remand to the trial court for a determination of the
amount of appellant’s reasonable costs. We need not and do not

1     Further undesignated statutory references are to the Code
of Civil Procedure.

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reach appellant’s contentions that the trial court abused its
discretion in finding respondent’s offers were reasonable and
made in good faith and erred in neglecting to consider whether
respondent’s costs were reasonable. We otherwise do not have
jurisdiction to consider appellant’s attempts to challenge the
underlying judgment.
                           BACKGROUND
      Appellant filed her complaint against respondent in April
2014, after she had vacated the apartment she rented from him.
Respondent made his first section 998 offer of $10,000 on
September 1, 2015 shortly before the original trial date.
Respondent made his second section 998 offer of $20,001 on
July 5, 2017, shortly before the July 24, 2017, trial. Both offers
specified the parties would bear their own costs and fees.
      After a four-day bench trial, the trial court ordered
judgment entered for appellant in the amount of $7,438. In its
July 31, 2017, ruling, the court summarized the case: “Plaintiff
vacated the property on January 31, 2014, believing it was
contaminated with mold and having suffered foul odors for an
extended period. She states that, as a result, she suffered a
stroke in January, 2014 and after moving out her cat died and
she required medical and psychological care.” The court
explained its judgment: “the Court finds that the Plaintiff has
met her burden in showing that she is entitled to rent abatement
and judgment for all of the days she was inconvenienced plus the
costs of the hotel stays in February, 2014.” The court awarded
appellant $4,538 for 110 days of inconvenience during 2011, 2012,
and 2013, and $2,900 for hotel stays in February 2014.
      The court also found appellant had failed to prove several
key facts to support more extensive damages and liability on her

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other claims. Appellant had offered no expert testimony that any
mold in the apartment exceeded permissible indoor levels. She
had offered “no competent evidence that the conditions in the
apartment were the cause of death of” her cat. Appellant did not
meet her burden of proving the causation of her stroke “ ‘within a
reasonable medical probability based upon competent expert
testimony.’ [Citation.]” The court added, “Plaintiff’s other claims
of damages similarly fail on the element of causation.” The court
deferred ruling on costs.
       Thereafter, on December 22, 2017, the trial court ruled on
costs: “The Court finds that Defendant made a good-faith and
reasonable offer to Plaintiff pursuant to CCP section 998. The
Court further finds that the Defendant is the prevailing party.
[¶] 1) Plaintiff’s motion to strike and/or tax Defendant’s costs is
denied. [¶] 2) Defendant is awarded requested attorney fees
pursuant to the rental agreement. [¶] 3) Plaintiff is not awarded
any costs or fees.” The court awarded respondent costs and
attorney fees totaling $30,483.55.
                            DISCUSSION
I. Appellant’s Challenges To The Damages Award Are Not
Cognizable.
       Before taking up the primary issues of costs, we address
appellant’s contentions about the damages award. In addition to
challenging the trial court’s post-trial order on fees and costs,
appellant contends her due process rights were violated by the
trial court’s failure to award (1) damages for annoyance/
discomfort on her nuisance claim; (2) damages for emotional
distress; (3) past lost wages; (4) damages for property loss; (5)
economic damages for out of pocket expenses; and (6) pre-
judgment interest. In addition she claims there were

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irregularities at trial which suggested the court acted out of bias
and prejudged the case.
       These contentions all arise from the underlying judgment
as to damages dated August 31, 2017. Appellant did not file a
timely notice of appeal from that judgment. Appellant’s notice of
appeal states that she is appealing from a judgment entered on
December 22, 2017. The December 22, 2017 judgment was the
trial court’s order on the parties’ various post-trial motions on
costs and fees. It did not affect or change the judgment on
damages entered August 31, 2017, except to show that
appellant’s award of damages is offset against the costs later
awarded to respondent pursuant to section 998, subdivision (e),
the order casting respondent landlord as the net creditor.
Because the August 31, 2017, judgment left no issue of damages
for future consideration by the court, the August 31, 2017
judgment was “final” when entered. (P R Burke Corp. v. Victor
Valley Wastewater Reclamation Authority (2002) 98 Cal.App.4th
1047, 1053 (P R Burke Corp.).)
       Appellant did not file a timely notice of appeal from the
damages award judgment. The notice of entry of the August 31,
2017 judgment was served on September 15, 2017. Appellant
had 60 days from the September 15, 2017 notice of entry within
which to file her notice of appeal. (California Rules of Court, rule
8.104(a).) Appellant filed a motion for a new trial, which on the
record before us would have extended her time to file a notice of
appeal until December 29, 2017.2 She did not file a notice of

2      The record on appeal shows that appellant filed a motion
for a new trial, which extended her time to file a notice of appeal.
(California Rules of Court, rule 8.108(b).) There was a hearing on
this motion on November 2, 2017, at the end of which, the trial

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appeal until January 11, 2018. Although the January 11 notice
of appeal was timely as to the costs order, “ ‘an appeal from a
postjudgment order [granting or] denying attorneys’ fees [or
costs] does not reopen the time for appealing from the underlying
judgment.’ [Citation.]” (P R Burke Corp, supra, 98 Cal.App.4th
at p. 1053.)
       Nonetheless, appellant contends that on appeal from the
post-judgment order on costs and fees we can review the damages
judgment as well. We cannot review the propriety of the damages
award itself. In an appeal from a post-judgment order, “ ‘the
issues raised by the appeal from the order must be different from
those arising from an appeal from the judgment. [Citation.] “The
reason for this general rule is that to allow the appeal from [an
order raising the same issues as those raised by the judgment]
would have the effect of allowing two appeals from the same
ruling.” ’ ” (P R Burke Corp, supra, 98 Cal.App.4th at p. 1053.)
       Thus, we may review appellant’s entitlement to costs and
attorney fees, limited to whether the trial court properly
calculated appellant’s total recovery within the meaning of
section 998 and whether the trial court abused its discretion in

court stated it would take the matter under submission. The
record does not contain a minute order ruling on the motion for a
new trial. (§ 660, subd. (c) [“A motion for a new trial is not
determined within the meaning of this section until an order
ruling on the motion is entered in the permanent minutes of the
court or signed by the judge and filed with the clerk.”].)
Accordingly, we treat the motion as denied by operation of law
“75 days after service on the moving party by any party of written
notice of entry of judgment.” (Ibid.) That date would have been
November 29, 2017. Appellant then had 30 days to file her notice
of appeal. (California Rules of Court, rule 8.108(b).)

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determining that respondent’s section 998 offers were reasonable
and in good faith. However, an appeal from the actual damages
judgment is untimely and therefore the judgment is
unreviewable.
       Further, even if we had jurisdiction to consider issues
arising from the August 31, 2017 judgment, we would be unable
to do so given the incomplete state of the record on appeal. This
action was tried over four days, but appellant has designated a
reporter’s transcript for only the first day. Appellant has not
provided a substitute such as transcripts of the electronic
recording or settled statements for the other three days of trial.3
The first document in the clerk’s record chronologically is the
minute order for the first day of trial. The only indication of pre-
trial motions, rulings or other events is the case summary sheet,
which contains very brief descriptions of pleadings and orders.
The party challenging a lower court judgment has the affirmative
obligation to provide an adequate record. In the absence of such
a record, the judgment must be affirmed. (Vo v. Las Virgenes
Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447-448.)
II. The Trial Court Improperly Calculated The “Net” Judgment.
       Appellant contends the trial court failed to calculate the
correct “net” judgment to ascertain whether she had obtained a
judgment more favorable than the section 998 offers. She
contends the trial court should have added her costs and attorney
fees to the damages award to determine the correct “net”
judgment. We agree.

3     The minute orders for July 25, 27 and 28 indicate that no
court reporter was present.

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       Normally, as the prevailing party, appellant would be
entitled under Civil Code section 1717 to an award of costs.
However, Section 998 provides that if a defendant makes a
settlement offer compliant with the statute and plaintiff does not
accept the offer, plaintiff must obtain a judgment more favorable
than the offer to recover her costs. (§ 998, subd. (c)(1).) If she
does not obtain a more favorable judgment, “the plaintiff shall
not recover his or her postoffer costs and shall pay the
defendant’s costs from the time of the offer.” (Ibid.)
       Section 998, subdivision (c)(2)(A) provides: “In determining
whether the plaintiff obtains a more favorable judgment, the
court or arbitrator shall exclude the postoffer costs.” As the
Fourth District Court of Appeal has explained: “By specifying
postoffer costs are excluded for purposes of determining whether
plaintiff obtained a more favorable judgment, the statute
necessarily implies preoffer costs are included. (§ 998, subd.
(c)(2)(A).)” (Martinez v. Eatlite One, Inc. (2018) 27 Cal.App.5th
1181, 1184 (Eatlite).) Costs include attorney fees for purposes of
section 998. (§ 998, subd. (c)(2)(B).)4 Contrary to appellant’s
argument, prejudgment interest is not included in costs. (Wilson
v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 382, 393-394.)

4     Respondent argues costs and attorney fees should not be
added to the judgment of damages to determine the more
favorable judgment issue under section 998 because costs and
fees are excluded from such a calculation when, as here, the
plaintiff prevails on a contract cause of action. Twenty-two years
ago, respondent would have been correct. The version of section
998, subdivision (c) relied upon by respondent was deleted in
1997.

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       When appellant’s judgment is calculated according to
Eatlite’s logical interpretation of section 998, her judgment is
more favorable than respondent’s first offer. Respondent’s offer
expressly excluded costs and attorney fees, and so $10,000 is the
total amount of the offer for section 998 purposes. (Cf. Eatlite,
supra, 27 Cal.App.5th at pp. 1184-1885 [if costs and fees are
included in § 998 offer, court should take value of costs and fees
into account when calculating value of the offer].)
       Appellant claimed $4,431.75 in pre-first offer costs (which
are acknowledged by respondent on appeal.) Appellant’s
damages judgment of $7,438 plus $4,431.75 in pre-first offer costs
plus $500 in requested attorney fees totals $12,369.75.5 Under
this calculation, appellant obtained a judgment more favorable
than the first section 998 offer.
       Respondent, however, made a second offer of $20,001.
Appellant has made a prima facie showing that she would be the
prevailing party with respect to that offer as well. If we add the
costs requested by appellant ($12,252.30) plus $500 in attorney
fees, appellant’s recovery totals $20,190.30, more than
respondent’s second offer. The trial court, however, did not make
findings on appellant’s or respondent’s respective motions to tax

5     The parties agree $500 is the maximum amount of attorney
fees permitted under the rental agreement. Respondent argues,
however, that appellant has forfeited her right to those fees.
Without the attorney fees, appellant’s total would be $11,869.75.
In respondent’s motion to tax costs in the trial court, respondent
argued that only $4,183.75 in costs were recoverable.
Respondent’s reasons for offering a higher figure on appeal are
not clear. Even if we accepted this lower number, however,
appellant’s total would be $11,621.75.

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each other’s costs. The court simply denied appellant’s motion,
seemingly because she was not the prevailing party, and it made
no ruling on respondent’s motion, seemingly because he was.
Thus, this matter must be remanded for the trial court to decide
whether appellant was the prevailing party with respect to the
second offer. In making this determination, the trial court should
include all costs reasonably incurred up to the date of the second
offer.
       Respondent contends, somewhat indirectly, that only
appellant’s pre-first offer costs should be added to the damages
award for purposes of evaluating whether appellant’s judgment
exceeded respondent’s second offer. We do not agree.
Respondent has twice conceded that appellant’s costs up to the
date of the first offer amounted to more than $4000. There is
thus no question that appellant achieved a judgment more
favorable than the first offer when her pre-first offer costs are
added to the damage award, making her the prevailing party on
the first offer. There is no reason to thereafter “freeze”
appellant’s costs to those incurred only before the first offer. (Cf.
Martinez v. Brownco Construction Co. (2013) 56 Cal.4th 1014,
1026 (Martinez) [date of first offer controls when defendant fails
to obtain a judgment more favorable than either rejected § 988
offer].)
       As the facts here show, a variety of different outcomes are
possible when a party makes multiple section 998 settlement
offers. The California Supreme Court has explained, however,
that there is no bright line rule which applies to every variation
of multiple offers. (Martinez, supra, 56 Cal.4th at pp. 1025-1026
[“we need not find the last offer rule or the first offer rule
controlling in all circumstances”].) Although we have found no

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published cases considering the factual scenario present in this
case,6 the Supreme Court has made clear that the appropriate
analytic framework for all multiple offer scenarios is to determine
which rule will effectuate the statutory purposes of section 998.
(Martinez, at pp. 1024-1026.)
       Fundamentally, section 998’s policy is to encourage
settlement. (Martinez, supra, 56 Cal.4th at p. 1026.) That policy
is implemented by “providing a strong financial disincentive to a
party–whether it be a plaintiff or a defendant–who fails to
achieve a better result than that party could have achieved by
accepting his or her opponent’s settlement offer. (This is the
stick. The carrot is that by awarding costs to the putative settler
the statute provides a financial incentive to make reasonable
settlement offers.)” (Bank of San Pedro v. Superior Court (1992)
3 Cal.4th 797, 804.) It would not further the purpose of section
998, or be consistent with its statutory implementation, to punish

6       Distefano v. Hall (1968) 263 Cal.App.2d 380 [second offer
controls where plaintiff obtained a judgment more favorable than
defendant’s first offer; judgment was reversed; defendant made a
new lower second offer; and plaintiff obtained a judgment at the
retrial which was more favorable than the second offer but not
the first offer]; Wilson v. Wal-Mart Stores, Inc., supra, 72
Cal.App.4th 382 [plaintiff was offeree and increased her offers
with the result that defendant did worse than the first offer but
better than the second; second offer controls]; see One Star, Inc.
v. STAAR Surgical Co. (2009) 179 Cal.App.4th 1082, 1094-1095
[if offeror withdraws second offer prior to acceptance, right to
cost-shifting is determined by previous offer]; see also Palmer v.
Schindler Elevator Corp. (2003) 108 Cal.App.4th 154, 157-158
[second offer extinguishes first offer even if second offer is
defective].)

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an offeree who beats an offeror’s first offer by freezing her costs
at the date of that low first offer. It likewise would not further
the purpose of section 998, or be consistent with its statutory
implementation, to reward an offeror who makes a low first offer
by freezing the offeree’s costs at the date of that low offer.
Accordingly, we hold that where an offeree achieves a judgment
more favorable than a first offer, the determination of whether an
offeree obtained a judgment more favorable than a second offer
should include all costs reasonably incurred up to the date of the
second offer.
       On remand, if the trial court finds appellant is not entitled
to all her costs and as a result did not recover a judgment more
favorable than respondent’s second offer, the trial court should
consider anew whether respondent’s second offer was reasonable
and in good faith. If the court finds it was, the court must
recalculate the costs to be awarded to respondent and include
only those costs incurred after the second offer. (§ 998, subd.
(c)(1) [if plaintiff fails to obtain judgment more favorable than
defendant’s offer, plaintiff “shall pay the defendant’s costs from
the time of the offer.”].)

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                            DISPOSITION
      The trial court’s amended judgment including the
incorporated December 22, 2017 order is reversed. The matter is
remanded to the trial court for a recalculation of appellant’s total
judgment in accordance with this opinion. If the court
determines that appellant did not receive a judgment more
favorable than respondent’s second offer, the court should re-
evaluate whether the second offer was reasonable and made in
good faith; if the court finds it was, the court should recalculate
respondent’s costs and attorney fees and include only those costs
reasonably incurred after the second offer.

      CERTIFIED FOR PUBLICATION

                                           STRATTON, J.

We concur:

             GRIMES, Acting P. J.

             WILEY, J.

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