Filed 2/5/19
               CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

ROSTACK INVESTMENTS, INC.,             B286069

       Plaintiff and Appellant,        (Los Angeles County
                                       Super. Ct. No. BC428298)
       v.

ANGELA C. SABELLA,

       Defendant and Respondent.



      APPEAL from a judgment of the Superior Court of Los
Angeles County. Michael M. Johnson, Judge; Holly J. Fujie,
Judge. Affirmed.
      Mayer Brown, Neil M. Soltman, John Nadolenco and
Christopher P. Murphy for Plaintiff and Appellant.
      Gibson, Dunn & Crutcher, Julian W. Poon and Samuel
Eckman for Defendant and Respondent.

                    __________________________
       Plaintiff Rostack Investments, Inc. obtained a summary
judgment against defendant Angela Sabella in an amount
exceeding $50 million. We reversed the judgment on appeal, and
awarded Sabella her costs as prevailing party. Sabella’s
memorandum of costs sought to recover approximately $1.4
million in costs related to her obtaining a surety bond, secured by
a letter of credit, pending the appeal. Rostack moved to tax those
costs, on the basis that they were neither reasonable nor
necessary, in that Sabella had sufficient assets to obtain a cash-
collateralized bond (without needing a letter of credit). The trial
court denied the motion to tax, concluding that Sabella’s bond-
related expenses were both reasonable and necessary. The court
entered judgment against Rostack for the full amount of the
disputed costs, and Rostack appeals. We affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
1.     The Underlying Dispute1
       Rostack brought suit against Sabella for breach of contract,
based on a note with outstanding principal of over $28 million.
In Rostack’s operative complaint, it sought unpaid principal and
interest, as well as attorney fees and costs of collection, based on
an attorney fees/legal expenses clause in the note.
       Sabella’s answer raised, among other things, the defense of
gift. Sabella argued that the note had simply memorialized an
intra-family loan from her multi-billionaire father via Rostack, a
corporate entity he had wholly controlled. Sabella believed her
father never intended her to use her own assets to repay the loan,
and had, in fact, given her the gift of loan forgiveness prior to his

1      Our discussion of the parties’ dispute and its procedural
history is taken from our opinion in the prior appeal. (Rostack
Invs., Inc. v. Sabella (Dec. 15, 2016, B260844) [nonpub. opn.].)



                                 2
death. Sabella took the position that it was her sister, who had
since taken control of Rostack, who was pursuing this action
against Sabella out of vengeance.
      After a great deal of procedural wrangling, the trial court
concluded that Sabella could not pursue the gift defense, and
entered summary judgment in favor of Rostack, in the amount of
$51,906,128.62, plus costs and attorney fees. Sabella appealed
and we reversed, concluding the trial court erred both
procedurally and substantively in disposing of Sabella’s gift
defense. As Sabella was the prevailing party on appeal, our
disposition stated that Rostack was to pay her costs on appeal.
The remittitur issued February 15, 2017.
2.    Sabella’s Appeal Bond
      The record in the current appeal reveals the following
course of events occurred after the trial court’s judgment in favor
of Rostack, while Sabella’s appeal was pending.
      Unless an undertaking is given, the perfecting of an appeal
does not stay enforcement of a judgment for money damages.2
(Code Civ. Proc., § 917.1, subd. (a)(1).) Initially, Sabella asked
Rostack if it would voluntarily stipulate to waiving the bond
requirement and agree to not pursue collection pending appeal.
Rostack declined. However, the parties stipulated to several
stays of enforcement of judgment, while Sabella investigated
various alternatives for obtaining an appeal bond.
      An undertaking “shall be for double the amount of the
judgment . . . unless given by an admitted surety insurer in
which event it shall be for one and one-half times the amount of

2     The statutes provide that the terms “undertaking” and
“bond” may be used interchangeably. (Code Civ. Proc.,
§ 995.210.)



                                 3
the judgment . . . .” (Code Civ. Proc., § 917.1, subd. (b).) Even
using an admitted surety insurer, as Sabella did, would require a
bond in an amount exceeding $77 million.
       The bulk of the evidence regarding Sabella’s investigation
of alternatives consists of several email threads between
Sabella’s attorneys and Amy Mea, a representative of Bond
Services Insurance Agency and Brokerage, LLC. Even before the
judgment was entered, Sabella’s counsel had started asking Mea
about different bond premium rates. Mea explained that the rate
quote depended on the type of collateral provided, whether a
letter of credit, securities, real estate, or something else.
Sabella’s counsel asked for “a range of options regarding the
collateral,” and suggested that Sabella “may be willing to do a cd
[presumably, certificate of deposit] or something with the full
amount in it.” Mea consulted with different sureties, and found
one which would charge as little as four-tenths of 1 percent on a
bond with a cash deposit.3
       While Mea was researching rates for a cash deposit,
Sabella’s counsel was also requesting information on the
procedure, and costs, involved in securing the bond with a letter
of credit, real property, or securities. Mea explained that with
real property, the bond premium is generally 4 percent of the
bond amount plus appraisal fees; and with securities, the
premium is 3-5 percent of the bond amount. However, the cost



3      At different times, Mea quoted different rates from
different sureties. Because the amount of the bond was so high,
some sureties were willing to negotiate on the rate to get the
business.




                                4
for a bond secured by a letter of credit would be the same lower
premium as for a bond secured by cash.
       By early December 2014, Sabella’s counsel said that she
was “likely” to obtain a bond secured by a letter of credit. There
followed a different series of e-mails, in which Sabella’s counsel
and Mea tried to agree on the bank from which Sabella would
obtain the letter of credit. Some of the banks Sabella proposed
were not acceptable to the sureties for a letter of credit that large.
Other proposed banks were unacceptable because they were
foreign institutions, while the sureties required FDIC-insured
U.S. lenders. Even when the bank was acceptable to the surety,
the premium the surety would charge varied, depending on the
bank.4
       Apparently frustrated by her inability to get a low enough
premium rate for a bond secured by a letter of credit from a bank
acceptable to Sabella, Sabella’s counsel again reopened discussion
about simply securing the bond with a cash deposit. Mea found a
surety which would charge 0.25 percent premium for the bond
secured by full cash collateral, and would pay 0.5 percent interest
on the deposit. This arrangement would net Sabella 0.25 percent
interest on her deposit, but would tie up $77 million in cash for
the duration of the appeal. Sabella’s counsel asked Mea if there
was any way she could “improve upon these rates based on the
size of the deposit?” There was not.
       Sabella ultimately obtained a bond secured by a letter of
credit. The annual premium on the bond was approximately


4     We observe that this is the rate that the surety would
charge for the appeal bond itself; Sabella would also be
responsible for any interest her bank charged in connection with
the issuance of the letter of credit.



                                  5
0.3 percent of the bond amount. The cost for the letter of credit
was 0.6 percent of the same amount.
3.     Proceedings on the Motion to Tax Costs
       Following our remittitur, Sabella sought her appellate
costs, including the bond and letter of credit premiums she had
paid for two years, in the total amount of nearly $1.4 million.
       Rostack moved to tax several items of Sabella’s costs; the
only ones at issue in this appeal are the bond and letter of credit
premiums. Rostack argued these expenses were not reasonably
nor necessarily incurred. Rostack’s position was that the e-mail
thread, and Sabella’s substantial wealth, established that Sabella
had the financial wherewithal to obtain a cash-collateralized
bond, which would have (1) obviated the need for a letter of credit
and (2) netted Sabella 0.25 percent interest in excess of the bond
premium.5 Rostack argued that Sabella instead “obtained a Bond
in what appears to be the most expensive way possible.” It
argued, “Sabella can squander her funds if she wishes. But she
cannot do so and demand that her opponent [pay] for her
extravagance.”
       Sabella opposed the motion, supporting her opposition with
her own declaration, stating that she chose to secure the
judgment with a bond collateralized by a letter of credit because
it “was the most economically advantageous for me because it

5      Rostack also argued that Sabella could have “offered
Rostack a security interest in some of her tens of millions of
dollars in assets and thereby avoid reliance on surety bonds.”
Rostack does not pursue this argument on appeal. We believe
that, just as Rostack was not obligated to simply refrain from
collection based on Sabella’s good faith, Sabella was not obligated
to offer her litigation adversary a security interest in her own
property.



                                 6
was the least expensive and most feasible” option. She explained
that prior to obtaining the bond, she and her advisors “diligently
investigated and considered all the various bond options.” As for
the cash-collateral alternative, Sabella stated that, although she
inquired about the costs involved, she “ultimately determined
that it was not feasible or economically sound for me to post the
$77,859,192.93 bond in cash.” She stated that she did not have
that amount available in cash at the time, and that, to post such
a bond, she would have had to sell many of her assets. As there
was not sufficient time to market them, she would have had to let
them go at “fire sale” prices, and, in any sale, she would also
incur “large taxes, fees and other costs of sale.” She concluded
that this would have been a “bad financial decision.” She selected
a letter of credit as collateral over real property or securities as
the costs for the former were less. Under all of the
circumstances, Sabella “determined that collateralizing the bond
with a letter of credit was the most cost efficient, time efficient
and prudent option.”
       In reply, Rostack argued that Sabella impliedly admitted
that a cash collateralized bond was available to her, and as this
was a less expensive alternative, its availability established that
Sabella’s choice was neither reasonable nor necessary.6
Curiously, Rostack then conceded that Sabella’s choice may have
been financially reasonable for her, stating, “Sabella may have
had numerous pecuniary incentives to pursue the bond structure

6     Rostack also argued that Sabella should have backed up
the statements in her declaration with financial evidence, and
objected to the declaration as lacking in foundation for this
reason. The trial court ultimately overruled these objections. On
appeal, Rostack notes the court’s ruling, but does not argue that
it was error.



                                 7
that she did, primarily to avoid lost opportunity costs by
encumbering her cash or other assets.” Rostack argued, however,
that those incentives were simply irrelevant.
       At the hearing on the motion to tax costs, the trial court
found the bond secured by a letter of credit to have been an
arm’s-length commercial transaction, reasonably entered into by
Sabella, and therefore denied the motion to tax. The court’s
ruling reflects that Sabella “examined alternative means to stay
enforcement and concluded that a surety bond with a letter of
credit was the best vehicle for her. [Her] decision and the costs
she incurred were reasonable, and [Rostack] has no legal right to
demand a less expensive alternative.”
4.     Order to Pay Costs as Judgment
       California Rules of Court, rule 8.278 governs awards of
costs on appeal. It provides that the clerk of the Court of Appeal
“must enter on the record, and insert in the remittitur, a
judgment awarding costs” to the prevailing party. (Cal. Rules of
Court, rule 8.278(b)(1).) After discussing the procedure for
determining the amount of costs in the trial court, the rule then
provides, “An award of costs is enforceable as a money judgment.”
(Cal. Rules of Court, rule 8.278(c)(3).)
       At the end of the hearing on Sabella’s motion to tax costs,
Sabella’s counsel requested that the court order payment be
made within 30 days. There was some discussion as to whether
the court’s cost award would be part of a single final judgment to
be entered after trial or a separate judgment immediately
appealable. After the hearing, Sabella submitted a proposed
judgment; her notice cited to authority that an award of appellate
costs constitutes a separate judgment, immediately appealable.
Rostack objected to the proposed judgment, arguing that it was




                                8
premature under the one final judgment rule. The trial court
entered the judgment as proposed by Sabella. Rostack filed a
timely notice of appeal.
                          DISCUSSION
      On appeal, Rostack makes two arguments. First, it argues
that the court’s judgment awarding costs was an improper
interlocutory judgment, which is not final or enforceable in any
way, although it is appealable as a void judgment. Second,
Rostack argues that the bond and letter of credit premiums were
not reasonable or necessary as a matter of law, because less
expensive alternatives were available. We disagree with both
arguments.
1.    The Judgment for Costs is a Final Enforceable Judgment
      As noted above, California Rules of Court, rule 8.278(c)(3)
provides that an award of costs on appeal “is enforceable as a
money judgment.” Rostack concedes this is so, but argues that
the rule does not say “when an enforceable judgment for a
specific amount of appellate costs should be entered.” (Emphasis
Rostack’s.) Rostack takes the position that the one final
judgment rule, as set forth in cases such as Kurwa v. Kislinger
(2013) 57 Cal.4th 1097, requires that there be only a single
judgment in any case, and that it is premature to enter an
enforceable judgment for appellate costs when the trial is yet to
be had.
      Rostack’s argument is meritless. Indeed, it was rejected as
early as 1931, when our Supreme Court resolved First Nat’l Bank
v. Stansbury (1931) 214 Cal. 190. In that case, the judgment had
been reversed on appeal, so the appellant was awarded its
appellate costs in a judgment. After retrial, the respondent was
successful, and obtained a judgment in its favor for a much




                                9
smaller amount of costs. The appellant again appealed the
judgment in favor of the respondent and, while the appeal was
pending, sought to execute on the prior judgment in its favor for
appellate costs (while allowing an offset for the small award in
favor of respondent). (Id. at p. 191.) The issue presented was
whether the previously-successful appellant should be enjoined
from collecting its costs award until its current appeal of the
second judgment was resolved. The Supreme Court concluded
that it should not, stating, “The judgment for costs of appeal in
the first case has long since become final and the judgment for
costs in the second trial has not yet become final. [¶] We
perceive no grounds upon which to deny appellants the right to
realize upon their judgment. Oftentimes the trial court refuses to
proceed with a second trial until the costs of the appeal from a
former judgment have been paid. [Citation.] There is no
interdependence between the judgment for costs of the former
appeal and any judgment which may subsequently be entered in
the main case.” (Id. at p. 192.)
       More recent authority is in accord. “ ‘[T]rial court costs are
a mere incident of the main judgment, and not separately
enforceable [citation], but after appeal, there may be a new trial
with even a further appeal, and the proceedings may cover a long
period of time. Accordingly, the award of costs on appeal, when
properly allowed in the trial court, represents an independent
judgment, enforceable by any available means. “It is a complete
judgment in itself that finds its origin in the order of an appellate
[court] or the Supreme Court affirming or reversing a judgment
of a lower court. The right to such judgment comes into being
when the order of the reviewing court becomes final. The
judgment itself is created when the successful party files his cost




                                 10
bill and his costs are taxed.” ’ [Citation.]” (Los Angeles Unified
School Dist. v. Wilshire Center Marketplace (2001) 89 Cal.App.4th
1413, 1419.) “If an appeal is taken from the judgment, the party
prevailing in the Court of Appeal is usually entitled to costs on
appeal. (Cal. Rules of Court, rule 8.278.) The award of costs is
included in the remittitur, although the amount of the award is
determined in the trial court. (Cal. Rules of Court,
rule 8.278(b)(1), (c).) These costs, however, are not added to the
trial court judgment, but constitute a separate judgment.
[Citations.]” (Lucky United Properties Investment, Inc. v. Lee
(2010) 185 Cal.App.4th 125, 138 (Lucky).)
       Rostack overlooks this authority, relying instead on a
second appeal in the Lucky litigation, Lucky United Properties
Investment, Inc. v. Lee (2013) 213 Cal.App.4th 635 (Lucky II).
Rostack suggests that Lucky II stands for the proposition that the
award of appellate costs does not constitute a separate judgment
but is instead incorporated into the trial court judgment. But the
Lucky II court was distinguishing a trial court’s award of
appellate costs (such as costs and fees awarded pursuant to Code
of Civil Procedure section 425.16, the anti-SLAPP statute) from
appellate costs awarded by the Court of Appeal, although the
amount is determined in the trial court. Lucky II reiterated that
when the costs are awarded by the Court of Appeal, they
constitute a separate judgment, but held that when the costs and
fees are awarded by the trial court, they are incorporated into the
trial court judgment. (Lucky II, supra, at p. 654.) The Lucky II
court further explained why the two are treated differently. “The
rule that appellate court cost awards constitute separate
judgments is grounded both in statutory language and in
rationales that do not apply to appellate cost and fee awards




                                11
under [the anti-SLAPP statute].” (Id. at p. 655.) These reasons
include that when we are concerned with an appellate court cost
award, it is the appellate court, not the trial court, that is the
source of the award – something which is “conceptually separate”
from the trial court judgment. (Ibid.) Additionally, “one
apparent purpose of the separate judgment rule for appellate cost
awards is to allow a litigant to collect the costs without having to
wait until the termination of potentially lengthy proceedings on
remand, which could not affect its entitlement to the appellate
costs.” (Ibid.)
        This is not the only authority on the subject of the finality
of an appellate court’s cost award. The issue has also arisen in
the context of appealability – specifically, whether an order
taxing appellate costs (or an order denying a motion to tax those
costs) is immediately appealable. In 1994, Division Five of the
Second District held that it was not, reasoning that an appellate
cost award is not a post-judgment order because, when the case
has been remanded for further proceedings, there is no judgment
for it to be post. (Barnes v. Litton Systems, Inc. (1994)
28 Cal.App.4th 681, 683.) However, in 2011, Division Two of the
Fourth District rejected the Barnes court’s analysis, holding that
Division Five had overlooked the fact that an appellate cost order
is post- the judgment of the Court of Appeal. (Krikorian Premiere
Theatres, LLC v. Westminster Central, LLC (2011)
193 Cal.App.4th 1075, 1083.) The Krikorian court reviewed the
history of the issue, and concluded that Barnes was an outlier, in
that California courts had held such orders were appealable as
postjudgment orders to Court of Appeal judgments consistently
since 1925. (Id. at pp. 1079-1081.) In the course of its analysis,
Krikorian noted, as did all of the cases we have discussed above,




                                 12
that the “award of costs is immediately enforceable.” (Id. at
p. 1083.) “It cannot be affected by any further proceedings in the
trial court.” (Ibid.)
       Rostack does not address much of this legal authority
directly. Instead, it makes a factual argument that the appellate
cost award in this particular case is not actually final because
Rostack is suing on a note which contained a clause which would,
Rostack alleges, entitle it to recover all of its “legal expenses”
from Sabella if it is ultimately successful – and those legal
expenses would include the appellate costs previously awarded
Sabella. It is, of course, premature for us to consider whether
such a clause would extend to appellate costs ordered by this
court in connection with the prior appeal. There has been no
trial, no prevailing party on the contract, and no attempt to
recover any such costs under the clause. This much, however, is
clear: the fact that Rostack may, in the future, possibly pursue
an argument that it has a right to reimbursement for the cost
award does not undermine the overwhelming legal authority that
the cost award is final.
2.     The Bond and Letter of Credit Premiums were Reasonable
       and Necessary
       The trial court’s exercise of discretion in granting or
denying a motion to tax costs will not be disturbed if substantial
evidence supports its decision. (Jewell v. Bank of America (1990)
220 Cal.App.3d 934, 941.) The applicable rule of court itemizes
the appellate costs which may be recovered “if reasonable.” (Cal.
Rules of Court, rule 8.278(d)(1).) Those items include, “The cost
to procure a surety bond, including the premium, the cost to
obtain a letter of credit as collateral, and the fees and net interest
expenses incurred to borrow funds to provide security for the




                                 13
bond or to obtain a letter of credit, unless the trial court
determines the bond was unnecessary.” (Cal. Rules of Court,
rule 8.278(d)(1)(F).) As bond premiums and interest expenses
incurred to obtain a letter of credit are specifically itemized by
the rule, the issue raised by this appeal is whether substantial
evidence supports the trial court’s conclusion that those items, as
incurred by Sabella in this case, were reasonable and necessary.
Rostack argues that they were not, because Sabella could have
obtained a cash-collateralized bond instead.
      However, the mere fact that an alternative procedure,
which would have been less expensive, was available does not
mandate that the option chosen was unreasonable or
unnecessary. (See Jewell v. Bank of America, supra,
220 Cal.App.3d at pp. 940-941 [the alternative was uncertain];
Acoustics, Inc. v. Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 916
[the alternative may have caused too much delay given the
party’s financial obligations].) In considering whether premiums
were necessary, some factors a court may consider in addition to
the availability of alternatives include: the expediency to the
judgment debtor of the alternative procedure, the delay the
alternative procedure entailed, the risk of using the alternative
procedure, and “other additional expense and interference” with
business operations which might be incurred by utilization of the
alternative procedure. (Jewell, supra, 220 Cal.App.3d at p. 941.)
      Sabella’s declaration explained that she had considered the
alternative procedure of a cash-collateralized bond, but had
rejected it as not feasible or economically sound for her. She did
not have the cash on hand, and would have had to liquidate
substantial assets, incurring transaction costs, taxes, and market




                                14
losses.7 Although Rostack sought to challenge this evidence with
other evidence suggesting Sabella did, in fact, have sufficient
cash easily available, Sabella’s declaration constitutes
substantial evidence that she did not – and the trial court was
free to accept this evidence and reject Rostack’s.
       There is one final point lurking in the background of this
case: lost opportunity costs.8 Rostack’s argument that Sabella
could have posted a cash-collateralized bond, and thereby earn a
net of 0.25 percent on her deposit, assumes not only that Sabella
had $77 million in ready cash, but also assumes that the same
$77 million could not have been put to better work for Sabella
and earn her a great deal more than the 0.25 percent she would
have received if it was tied up in the bond. Indeed, unspoken in
Sabella’s declaration was the premise that, given the choice
between a net gain of 0.25 percent on a deposit of $77 million,

7     Rostack focusses on Sabella’s statement, “At the time I
obtained the bond, I did not have $77,859,192.93 available in
cash.” Rostack argues that this statement is a “negative
pregnant,” which is pregnant with the implication that she had
the cash ready at a nearby date, or had the amount less one cent
available on the date she obtained the bond. We need not
address this argument because it takes Sabella’s statement out of
context. Sabella’s declaration explained that to be able to post
the cash, she would have had to sell “many” of her assets at “fire
sale” prices – statements which flatly contradict the implied
statements Rostack would infer from the so-called “negative
pregnant” standing alone.

8     Sabella raises the issue in her respondent’s brief on appeal,
but did not specifically address it before the trial court. We do
not address the evidence she raises on the point for the first time
on appeal. As we have noted, Rostack discussed the issue in its
reply in support of its motion to tax costs.



                                15
and a net loss of 0.9 percent in bond/letter of credit premiums,
the loss of 0.9 percent was the preferable choice – given what she
could otherwise do with her $77 million. Rostack itself
recognized the point, stating, “Sabella may have had numerous
pecuniary incentives to pursue the bond structure that she did,
primarily to avoid lost opportunity costs by encumbering her cash
or other assets.” Rostack stated, however, that “the law is clear
that such lost opportunity costs should not be taken into
consideration when awarding costs on appeal.” On the contrary,
the law is only that lost opportunity costs should not be awarded.
(See Siry Investments, L.P. v. Farkhondehpour (2015)
238 Cal.App.4th 725, 733 [acknowledging the argument that an
appellant might seek lost opportunity costs was “a valid concern,”
but holding it did not apply in that case]; Sequoia Vacuum
Systems v. Stransky (1964) 229 Cal.App.2d 281, 289 [not allowing
recovery of interest associated with borrowing money to deposit a
cash bond for fear that to do so would open the door to recovery of
lost opportunity costs].) The parties have not cited, and
independent research has not disclosed, any authority specifically
addressing whether lost opportunity costs are a factor which can
be taken into consideration when determining whether costs
incurred were reasonable and necessary. We believe that lost
opportunity costs are an appropriate factor in determining the
method used to bond the judgment. If lost opportunity costs are
not considered at all, an appellant must choose the bonding
alternative which will result in the lowest cost being passed on to
the respondent (should the appellant be successful on appeal)
even if that alternative results in a greater net financial loss to
the appellant if the appeal is unsuccessful and the appellant
must bear the costs itself. If “reasonable” is to mean anything, it




                                16
must mean reasonable to the appellant under all of the
circumstances. It is reasonable for the appellant to choose the
method that is cost-effective based on its own financial situation;
not to be forced to choose what might be best for the respondent.
(See Jewell, supra, 220 Cal.App.3d at p. 941 [identifying factors
in the reasonableness analysis from the debtor’s point of view].)
      The trial court’s determination that the bond and letter of
credit costs were reasonable and necessary is supported by
substantial evidence, and therefore must be affirmed.
                          DISPOSITION
      The judgment awarding costs is affirmed. Rostack is to pay
Sabella’s costs on appeal.




                                          RUBIN, J.*
WE CONCUR:




            BIGELOW, P. J.




            GRIMES, J.




*      Presiding Justice of the Court of Appeal, Second Appellate
District, Division Five, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.



                                17
