Daily Blast July 23, 2013

On July 23, 2013, the California Court of Appeal, Second District, Division Three (Los Angeles) filed an opinion in Mon Chong Loong Trading Corp. v. Superior Court of the State of California, County of Los Angeles (July 23, 2013, B240828) __ Cal.App.4th __, addressing whether an order to pay expert witness fees under the cost-shifting provisions of Code of Civil Procedure section 998 is appropriate when the case has been voluntarily dismissed. (Slip opn., p. 2.) The court held that a voluntary dismissal constitutes the conclusion of the action and is therefore an appropriate precipitating event triggering the trial court’s discretion to assess expert witness fees under section 998. (Ibid.)

Plaintiff fell while shopping at defendant’s supermarket, which resulted in an alleged back injury. (Slip opn., p. 2.) Defendant served plaintiff with a demand for exchange of expert witness lists and reports as well as a notice for an independent medical examination. (Id. at p. 3.) Defendant also made plaintiff an offer under section 998 to permit entry of judgment in favor of plaintiff for $10,000 in return for a release of all existing and future medical, legal and other liens arising from the incident. Plaintiff did not respond to the offer, did not appear for the independent medical examination and did not participate in the exchange of expert witness lists and reports. (Ibid.) Defendant moved to preclude plaintiff from calling expert witnesses or offering expert testimony. Plaintiff filed a substitution of attorney and then on the last day to file an opposition to the motion in limine, plaintiff’s new attorney filed a request for voluntary dismissal of the complaint without prejudice. The dismissal was entered. (Ibid.) Defendant filed a memorandum of costs including expert witness fees. (Id. at p. 4.) Plaintiff moved to strike the memorandum of costs or in the alternative, tax the costs with respect to the expert witness fees. The trial court granted the motion to tax the expert witness fees. (Ibid.)

The Court of Appeal first noted that the order taxing costs following the clerk’s dismissal was not appealable. (Slip opn., p. 5.) An appeal must come from a final judgment or order. Here, there had been no judgment, only a dismissal. According to the court, the entry of dismissal by the clerk “is a ministerial, not a judicial, act, and no appeal lies therefrom.” (Id. at p. 6.) However, the Court of Appeal exercised its discretion to construe the appeal as a petition for writ of mandate because the matter presented an issue of first impression. (Ibid.)

The Court of Appeal then held the trial court erred to the extent it required the defendant, who made a valid section 998 offer, to first obtain a judgment in the case before the trial court could consider its claim for recovery of expert witness fees. (Slip opn., p. 9.) Expert witness fees may be recovered following a valid section 998 settlement offer that is not accepted and if plaintiff fails to obtain a more favorable judgment or award. (Id. at p. 7.) Section 998 does not require the party who has submitted a valid and reasonable offer to achieve a specific result. Section 998 requires the plaintiff who refused the reasonable settlement offer to obtain a more favorable judgment or award in order to avoid possible liability for fees. (Id. at p. 8.) A plaintiff who does not obtain any award at all fails to obtain a more favorable judgment or award. (Ibid.) While a lawsuit may be concluded by a voluntary dismissal, the price of such a dismissal is the payment of costs under section 1032. Section 998 expands those costs to include the discretionary award of expert witness fees.

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