Settlement Agreement Silent On "Costs" Leads To Prevailing Party Award


In deSaulles v. Community Hospital of the Monterey Peninsula, 2014 DJDAR 5571 (2014), the California Court of Appeal for the Sixth Appellate District decided that a prevailing party was entitled to costs, despite the fact that the controlling settlement agreement was silent on that point.

The plaintiff sued her employer, asserting numerous causes of action. The first cause of action included a claim that the employer did not accommodate the employee’s disability. The employer moved for summary adjudication of that claim and prevailed. The victory effectively precluded the employee from presenting evidence related to additional causes of action for retaliation, wrongful termination and emotional distress.

The parties then agreed to settle the remaining claims in exchange for a payment of approximately $23,000. The settlement agreement was silent on the issue of recoverable costs. Both sides then requested mandatory costs as the “prevailing party” under Code of Civil Procedure Section 1032. The trial court granted the employer’s request, awarding over $11,000 in costs.

The employee appealed and the Sixth District reversed the trial court. The court of appeal noted that Section 1032 entitles a “prevailing party,” as a matter of right, to recover costs. For purposes of the statute, a “prevailing party” includes the party with a net monetary recovery. 

The court of appeal reasoned that although the employer obtained a judgment denying the employee relief, the judgment was reached following a settlement payment to the employee. The court considered that payment a “net monetary recovery” and concluded that the trial court should have awarded the employee her costs.


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Hinshaw & Culbertson LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.