Kaufman v. Geico Indem. Co.

• Decision Date: 03 September 2015
• Docket Number: No. 3:13-cv-01932-HZ,3:13-cv-01932-HZ
• Court: U.S. District Court — District of Oregon
• Parties: SABRINA GRETE KAUFMAN, f/k/a Sabrina Grete Carranza, Plaintiff, v. GEICO INDEMNITY COMPANY, Defendant.

SABRINA GRETE KAUFMAN, f/k/a Sabrina Grete Carranza, Plaintiff, v. GEICO INDEMNITY COMPANY, Defendant.

No. 3:13-cv-01932-HZ

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

September 3, 2015

OPINION & ORDER

Keil M. Mueller

Jennifer S. Wagner

Steve D. Larson

STOLL STOLL BERNE

LOKTING & SHLACHTER P.C.

209 S.W. Oak Street

Portland, OR 97214

Rodney F. Pillsbury

PILLSBURY & READ, P.A.

1204 E. Washington

Greenville, SC 29601

Attorneys for Plaintiff

Joshua Grabel

Sheila Carmody

SNELL & WILMER LLP

One Arizona Center

400 East Van Buren St. Suite 1900

Phoenix, AZ 85004

Douglas G. Houser

Stuart Duncan Jones

BULLIVANT HOUSER BAILEY, PC

300 Pioneer Tower

888 S.W. Fifth Avenue

Portland, OR 97204

Attorneys for Defendant

HERNÁNDEZ, District Judge:

On June 5, 2015, this Court granted summary judgment to Defendant GEICO Indemnity Company in this class action lawsuit brought by Plaintiff Sabrina Kaufman.¹ Plaintiff alleged that Defendant breached the parties' automobile insurance policy contract (hereinafter, "Policy"). At issue was the interpretation of a provision of the Policy regarding the application of deductibles to damage incurred as a result of a collision between two vehicles insured under one Policy. This Court found that the plain language of the Policy unambiguously supported Defendant's interpretation and that Plaintiff's proposed interpretation was unreasonable. See Opinion & Order, June 5, 2015, ECF 81.

Defendant now seeks costs from Plaintiff in the amount of $5,375.47.² In addition, Defendant submits a supplementary request for $5,979.50 in attorney's fees for costs incurred defending the breach of contract allegations made by Arizona resident Dallis Hughes, a formerplaintiff who was voluntarily dismissed from the case prior to this Court's summary judgment ruling. For the reasons that follow, the Court grants in part Defendant's Bill of Costs and grants in full Defendant's request for attorney's fees.

STANDARD

I. Costs

Under Federal Rule of Civil Procedure 54, costs "should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). Rule 54 creates a presumption in favor of awarding costs to the prevailing party. E.g., Ass'n of Mexican-Am. Educators v. California, 231 F.3d 572, 592 (9th Cir. 2000). "[I]f a district court wishes to depart from that presumption, it must explain why so that the appellate court will be able to determine whether or not the trial court abused its discretion ... [and] explain why a case is not ordinary." Id. at 594 (internal quotation marks omitted). To rebut the presumption, the court may consider "the losing party's limited financial resources, misconduct on the part of the prevailing party . . . the importance and complexity of the issues, the merit of the plaintiff's case, . . . and the chilling effect on future . . . litigants of imposing high costs." Save Our Valley v. Sound Transit, 335 F.3d 932, 945 (9th Cir. 2003) (citations omitted). The district court, however, "needs no affirmatively expressed reason to tax costs. Rather, it need only conclude that the reasons advanced by the party bearing the burden—the losing part—are not sufficiently persuasive to overcome the presumption." Id. at 946.

Costs taxable under Rule 54(d) "are limited to those set forth in 28 U.S.C. §§ 1920 and 1821[.]" Twentieth Century Fox Film Corp. v. Entm't Distrib., 429 F.3d 869, 885 (9th Cir. 2005). Section 1920 lists the specific items a prevailing party may recover as costs:

(1) Fees of the clerk and marshal;

(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

28 U.S.C. § 1920(1)-(6). The district court retains broad discretion to decide how much to award, if anything. Padgett v. Loventhal, 706 F.3d 1205, 1209 (9th Cir. 2013); see also Arboireau v. Adidas Salomon AG, No. 01-105-ST, 2002 WL 31466564, at *4 (D. Or. June 14, 2002) (trial judge has "wide discretion" in awarding costs under Rule 54(d)(1)).

II. Arizona's Attorney's Fees Statute

Arizona law provides that "[i]n any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees." A.R.S. § 12-341.01 Furthermore, "[t]he award of reasonable attorney fees pursuant to this section should be made to mitigate the burden of the expense of litigation to establish a just claim or a just defense. It need not equal or relate to the attorney fees actually paid or contracted, but the award may not exceed the amount paid or agreed to be paid." Id.

DISCUSSION

I. Costs Generally

Defendant submits a Bill of Costs in the amount of $5,375.47 against Plaintiff Kaufman. Plaintiff argues that Defendant's Bill of Costs should be denied in its entirety. Plaintiff contends that Defendant failed to confer prior to filing its cost bill, the case had merit, the case was of substantial public importance, awarding costs to Defendant would have a chilling effect on other consumers who might similarly seek to challenge their insurance companies with respect to commonly applicable coverage terms, and there is significant economic disparity between Plaintiff and Defendant.

Defendant concedes that it did not comply with Local Rule 7-1(a)(1), which requires that parties confer prior to filing motions. Defendant conferred with Plaintiff five days after filing its motion. The Court cautions Defendant about such behavior in the future and stresses the importance of the conferral requirement to the efficient operation of the courts. That said, the Court declines to deny the motion due to Defendant's failure to confer, given that the conferral requirement was met prior to Plaintiff filing her objections to this motion.

As to Plaintiff's remaining arguments, the Court disagrees that the case had merit. Plaintiff's proposed interpretation of the Policy was unreasonable. The Policy unambiguously supported Defendant's interpretation—when an accident involves two vehicles insured under one Policy, each vehicle is subject to separate deductibles. See Opinion & Order, June 5, 2015, ECF 81.

Nor does the Court agree that the case was of substantial public importance or that awarding costs to Defendant would have a chilling effect on other consumers. This case is unlike other cases cited by Plaintiff where the Ninth Circuit recognized the importance of testing the boundaries of the law or eradicating unlawful discrimination. See, e.g., Ass'n of Mexican-Am. Educators, 231 F.3d at 592; Stanley v. Univ. of S. California, 178 F.3d 1069, 1080 (9th Cir. 1999). Plaintiff's breach of contract action did not present a complex or novel issue of law. And while Plaintiff argues that the action carried the potential to benefit over two hundred policyholders, this Court never ruled on Plaintiff's motion for class certification. Therefore, the potential impact of this case, even if Plaintiff had succeeded, is speculative.

Finally, Plaintiff's argument regarding the significant economic disparity between her and Defendant is diminished by Plaintiff's testimony that her attorneys paid for all of the costs incurred in the litigation. Kaufman Decl. 25:13-16, ECF 92-1; see also Tibble v. Edison Int'l,CV-07-5359-SVW (AGRx), 2011 WL 3759927, at *3 (C.D.Cal. Aug. 22, 2011) ("chilling effect" was minimal because plaintiffs were not liable for costs under the fee arrangement); Taylor v. AutoZone Inc., No. CV 10-08125-PCT-FJM, 2012 WL 2357379, at *2 (D. Ariz. June 20, 2012) (finding that plaintiffs' personal financial situation did not support setting aside the presumptive award of costs because plaintiff's counsel was "foot[ing] the bill"); Jardin v. DATAllegro, Inc., 08-CV-1462-IEG (WVG), 2011 WL 4835742, at *4 (S.D.Cal. Oct. 12, 2011) (denying motion to deny costs in part because plaintiff "has not argued that he—as opposed to his counsel, pursuant to a fee agreement—will have to pay the cost award himself").

In sum, Plaintiff provides no basis for distinguishing this case from an "ordinary" case for which costs are properly allowed. Ass'n. of Mexican-Am. Educators, 231 F.3d at 593 ("Federal Rule of Civil Procedure 54(d)(1) establishes that costs are to be awarded as a matter of course in the ordinary case"). Therefore, the Court proceeds to analyze Plaintiff's specific objections to Defendant's claimed costs.

II. Specific Objections

a. Service of process, witness fee, and transcript fee for Dallis Hughes' deposition

Dallis Hughes was one of two named plaintiffs in this class action when the case was filed in October of 2013. On August 18, 2014, Mr. Hughes was voluntarily dismissed from the case. See ECF 27. On August 22, 2014, Defendant filed a notice of intent to subpoena Mr. Hughes and served him the following day. See ECF 27 and Cost Bill Ex. A at 4, ECF 83.

To be awarded as costs, deposition transcripts must have been "necessarily obtained for use in the case." 28 U.S.C. § 1920(2). "In general, the mere fact that items are neither introduced into evidence nor otherwise become part of the official court record is not determinative of whether that item was reasonably or necessarily obtained for use in the case." Frederick v. Cityof Portland, 162 F.R.D. 139, 143 (D. Or. 1995). While it is accurate to state that "disallowance for expenses of depositions not used at trial is within the district court's discretion[,]" it is equally true that a "deposition need not be absolutely indispensable to justify an award of costs; rather, it must only be reasonably necessary at the time it was taken, without regard to later developments that may eventually render the deposition unneeded at the time of . . ....