|
| Home | About Our Mediators | Legal Updates | Shannon B. Jones Law Group | Contact Us |
|
LEGAL UPDATES Fees Incurred by Party For Judicial Referee Are Not Recoverable As Costs When the Parties Agree to Share These Costs In Writing by Denise R. Hannan - March 18, 2009 In CARR Business Enterprises, Inc. (“CARR”) v. City of Chowchilla, CARR entered into a contract with the City of Chowchilla (“the City”). A dispute arose between CARR and the City, and the parties agreed to have the dispute decided by a judicial referee. California law allows parties to agree to have their dispute decided by a judicial referee, who is agreed upon by the parties, and paid by the parties. Cal. Code Civ. Proc. §638. A judicial referee’s fees “shall be paid as agreed by the parties.” Cal. Code Civ. Proc. §645.1. CARR and the City agreed that “compensation for the referee shall be paid fifty percent (50%) by Chowchilla and fifty percent (50%) by CARR.”The parties’ dispute was presented to the judicial referee who issued a decision finding largely in favor of CARR. CARR concluded that it was the prevailing party, and presented a demand for costs incurred to the trial court. CARR’s memorandum of costs included nearly $45,000 in judicial referee fees. The City contested CARR’s right to claim judicial referee fees as costs. It cited the parties’ express agreement that the referee would be paid “fifty percent (50%) by Chowchilla and fifty percent (50%) by CARR.” The trial court denied the City’s challenge to the fees, and awarded CARR its full costs. The City appealed. On appeal, the Court of Appeals reversed the lower court and ruled in favor of the City. The Court of Appeals concluded that, pursuant to C.C.P. Section 645.1, the parties’ agreement for how the judicial referee’s fees would be paid was determinative. In this case, the Court of Appeals held that the parties’ express agreement required each party to bear fifty percent (50%) of the fees, without regard to the eventual outcome of the dispute. The Court of Appeals held that if an agreement is silent on how fees would be paid, then a trial court has discretion to determine how the fees should be borne by the parties. However, when the parties’ agreement expressly states how the fees will be paid, the courts are bound by this language. The Court of Appeals overruled the trial court’s determination and remanded the matter to the trial court for a proper determination of the costs awardable to CARR. -Denise R. Hannan, Esq., Partner, drh@sbj-law.com |
| Back | Print Home | About Our Mediators | Legal Updates | Shannon B. Jones Law Group | Contact Us |