February 06, 2019 Practice Points

Defendant Awarded $1.4 Million in Costs Despite Cheaper Alternative

A California appeals court held that the mere fact that an alternative that would have been less expensive was available does not render the costs unreasonable or unnecessary.

By Sanford Hausler

The California Court of Appeals, Second Appellate District has awarded costs to a defendant who obtained reversal of a judgment exceeding $50,000,000. Her costs included $1.4 million she incurred in obtaining a surety bond that she posted to stay enforcement of the judgment. The plaintiff sought to strike those costs, asserting that the defendant could have obtained a cash collateralized bond, which would have been less expensive, but the court held that the amounts sought were reasonable and necessary and that the mere fact that an alternative that would have been less expensive was available does not render the costs unreasonable or unnecessary. In this case, the defendant did not have the cash available to collateralize the bond and would have had to liquidate substantial assets. In addition, the court held that lost opportunity costs, which the defendant would have suffered if she collateralized the surety bond with cash, is a factor to be considered in determining the method used to bond the judgment.

Sanford Hausler is of counsel with Cox Padmore Skolnik & Shakarchy LLP in New York, New York.


Copyright © 2019, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).