Filed 8/8/18

                  CERTIFIED FOR PUBLICATION

    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                  SECOND APPELLATE DISTRICT

                          DIVISION FOUR



LAOSD ASBESTOS CASES
DELGADINA ALFARO,                         B281022

        Plaintiff and Respondent,         (Los Angeles County
                                          Super. Ct. No. BC583520/
        v.                                JCCP4674)


COLGATE-PALMOLIVE COMPANY,

        Defendant and Appellant.



      APPEAL from an order of the Superior Court of
Los Angeles County, John Kralik, Judge. Reversed and
remanded.
      Foley & Mansfield, Gary D. Sharp, Keith M. Ameele, Louis
C. Klein, Peter M. Mularczyk and Margaret I. Johnson for
Defendant and Appellant.
      The Lanier Law Firm and Mark A. Linder for Plaintiff and
Respondent.
                         INTRODUCTION
       This is the second appeal arising out of a lawsuit by
plaintiff Elizabeth Alfaro,1 in which she alleged that she
developed mesothelioma as a result of exposure to asbestos
contained in talcum powder products. Her claims for negligence
and strict product liability proceeded to trial against two
defendants, including appellant Colgate-Palmolive Company
(Colgate), a talcum powder manufacturer. The jury found for
Colgate on the issue of exposure. We previously affirmed that
judgment on appeal.
       Colgate now appeals the trial court’s order granting
Alfaro’s motion to tax costs. Colgate argues it was entitled to
costs as the prevailing party under Code of Civil Procedure
section 1032,2 as well as expert witness fees after Alfaro rejected
an offer to compromise under section 998. The court denied the
entirety of Colgate’s request for over $300,000 in costs, finding
that Alfaro had no ability to pay and that it would be unjust to
impose a large cost award under the circumstances. Colgate
contends the trial court lacked the authority to exercise its
discretion in this manner and, further, that Alfaro failed to
present sufficient evidence of an inability to pay. We agree that
the trial court abused its discretion in denying all costs requested
by Colgate and therefore reverse. The trial court also erred in
failing to determine whether Colgate made its section 998 offer in

      1 Alfaro died on March 15, 2017, while her appeals were
pending. On July 5, 2017, we granted plaintiff’s unopposed
motion seeking to substitute her mother, Delgadina Alfaro, as her
successor-in-interest in this action.
      2 All further code citations are to the Code of Civil

Procedure unless otherwise indicated.



                                 2
good faith. We therefore remand to allow the trial court to reach
that issue in the first instance.
           FACTUAL AND PROCEDURAL HISTORY
I.     The Lawsuit
       Alfaro was diagnosed with mesothelioma in her lungs and
abdomen in 2015, at age 38. She filed this action in May 2015,
alleging causes of action for negligence and strict product liability
against 14 defendants, including Colgate and talc supplier
Imerys Talc America, Inc. (Imerys). She alleged that her
mesothelioma was caused by exposure to asbestos contamination
in talcum powder products she used as a child. Ultimately, 12
defendants were dismissed prior to trial, leaving only Colgate and
Imerys.
II.    Offer to Compromise
       Colgate moved for summary judgment in February 2016.
On April 6, 2016, the day before the hearing on the motion,
Colgate served an offer to compromise pursuant to section 998.
Therein, Colgate offered to settle the dispute for a mutual waiver
of costs in exchange for a dismissal of Alfaro’s claims. Alfaro did
not accept the offer.
       On April 15, 2016, the court issued a written ruling
denying summary judgment. The court noted that it “shares
[Colgate’s] concern about the potential layers of speculation
involved in Plaintiff’s theory of liability.” However, the court
concluded Colgate had failed to meet its initial burden and,
further, that there were triable issues of fact precluding
summary judgment.




                                 3
III.    Trial, Verdict, and Appeal
        The case proceeded to trial against Colgate and Imerys.
After three weeks of trial and several days of deliberations, the
jury voted nine to three on the first question of the special verdict
form, finding that Alfaro was not exposed to asbestos from
Colgate’s talcum powder. Accordingly, the court entered
judgment for Colgate and Imerys in August 2016.
        Alfaro appealed, arguing that the trial court erred in
excluding testimony from one of her experts regarding her
exposure to asbestos. We affirmed the judgment in a prior
unpublished opinion, Alfaro v. Imerys Talc America Inc. (Aug. 25,
2017, B277284) (nonpub. opn.).
IV. Costs
        Colgate filed a memorandum of costs in August 2016,
requesting a total of $311,543.86 in costs, as follows: $2,385 for
filing and motion fees; $150 for jury fees; $33,668.49 in deposition
costs; $115,610.06 in expert witness fees pursuant to section 998;
$12,133 for models, blowups, and photocopies of exhibits; $7,046
for court reporter fees; and $140,551.31 in trial travel and lodging
costs. -
        Alfaro filed a motion to tax Colgate’s costs, arguing that for
all of the costs requested, Colgate failed to show that the costs
were reasonable and necessary and failed to provide proof of the
costs. Alfaro also argued that Colgate’s request for expert
witness fees was based on a “token” bad faith offer to compromise
under section 998.
        Colgate opposed, attaching receipts and invoices in support
of the costs it claimed. Colgate argued that the items sought
were properly recoverable, reasonably necessary and reasonable




                                  4
in amount. Colgate withdrew $380.41 in travel expenses, stating
those costs were asserted in error.
       Alfaro filed a reply. In light of the receipts submitted by
Colgate, she withdrew her motion with respect to jury fees and
court reporter fees. She also withdrew her objections to
particular items, based on the documentation provided by
Colgate.
       The court issued a minute order continuing the hearing on
Alfaro’s motion to tax costs. The court stated it was “concerned
that an award of costs against Ms. Alfaro under the facts of this
case will violate fundamental principles of due process of law.”
The court directed the parties to be prepared to address this issue
at the hearing.
       At the hearing in October 2016, the court indicated it felt
imposing a large cost award in some cases represented a
“problem with the way justice was being imposed . . . a problem of
due process.” The court further stated that a plaintiff like Alfaro
“doesn’t have fair notice of what the penalty [for bringing a
lawsuit] will be. The penalty is, in view of her assets, extremely
out of proportion to her means.” The court believed that Alfaro,
“as far as I know, and I think it’s highly likely, has no money. . . .
I think it’s admitted she has very little life left. And so I think
that the state’s purposes for its statute are just not served here in
any meaningful way. . . . She’s being punished totally out of
proportion to the act that she committed, which was to bring this
case without being sure of the science. But she herself has no
way of understanding that science.” In addition, the court noted
it did not know the extent of Alfaro’s assets, “but through the
testimony I got a pretty good idea of what her life is and where




                                  5
it’s going.” The court allowed the parties to submit supplemental
briefing on this issue.
       Colgate filed a supplemental opposition, arguing that
Alfaro had never objected on the basis of due process. Colgate
further asserted that there was no due process violation and that
the court lacked the authority to deny costs based on plaintiff’s
ability to pay.
       In her supplemental brief, Alfaro stated that she “lacks the
resources with which to pay even a modest amount of Colgate’s
costs.” Specifically, she noted her terminal condition and the
parties’ stipulation that her medical expenses totaled $320,000 at
the time of trial. She also pointed to evidence that she was
disabled and unemployed. Prior to her diagnosis, Alfaro “worked
hourly jobs in retail on a part-time basis.” Alfaro also stated that
she and her family had “modest means,” and did not “have any
assets with which to pay” hundreds of thousands of dollars in
costs. She cited to evidence that her mother lived with Alfaro’s
aunt and her brother was “staying” with Alfaro in Los Angeles.
       The court took the matter under submission. In December
2016, it issued a statement of decision granting Alfaro’s motion to
tax costs and denying all costs requested by Colgate.3 The court
found, based on the evidence at trial, that Alfaro was unemployed
and unlikely to return to work, there were no other possible
sources of asbestos exposure, and that she did not recover from
any of the other defendants in the case. The court also credited
Alfaro’s evidence “showing that she had no means to pay any
award of costs, and that she faces prohibitive medical expenses in
connection with her illnesses.”

      3 The court also denied the costs requested by Imerys,
totaling over $300,000. Imerys is not a party to this appeal.



                                 6
       The court concluded it had the “inherent power to remit
costs whenever to do so would be in the interests of justice or
where to do so would infringe upon the right to seek redress of
grievances,” citing Martin v. Superior Court (1917) 176 Cal. 289
(Martin). The court noted that section 1033.5 required allowable
costs to be “reasonable in amount,” and concluded that “such
language requiring ‘reasonableness’ permits the discretion
necessary to decline to award costs in a case such as this.” The
court further explained its view that an award of costs against
Alfaro would effect “an inhumane and indecent result.” It
continued, finding that Alfaro “is a seriously ill young woman
caught in the middle of a hotly contested scientific debate and a
contested investigation of events that occurred decades ago. The
parties conducting this debate and investigation are well-
financed interest groups that have a vested financial interest in
the outcome which far exceeds Ms. Alfaro’s interest. . . . Her
‘choice’ of whether to proceed cannot be truly independent, and it
is profoundly unfair to punish her. If it were the unsuccessful
attorneys or corporate interests who were to be punished based
on the outcome, there might be some rationality to the state’s
costs scheme, but in this particular case it operates arbitrarily.”
       In light of this conclusion, the court did not reach the issue
whether Colgate’s section 998 offer was made in good faith. The
court noted, however, that “there is a very substantial issue” on
this point and that Colgate’s offer “made no attempt to
compromise this issue based upon the probabilities of an adverse
outcome or take into account the huge additional litigation
expenses that [Colgate would] incur in any event.”




                                  7
       Colgate timely appealed from the trial court’s order.4
                            DISCUSSION
       Colgate contends the trial court erred in granting Alfaro’s
motion to tax all of Colgate’s costs. Specifically, Colgate argues
the trial court improperly considered evidence of Alfaro’s
financial situation in declining to award any of the costs incurred
by Colgate as the prevailing party in the litigation. In addition,
Colgate asserts the court abused its discretion by failing to assess
whether its offer to compromise was made in good faith, instead
denying Colgate’s request for expert witness fees based on
Alfaro’s inability to pay. We agree with Colgate’s contentions and
reverse.
I.     Costs Claimed Pursuant to Sections 1032 and 1033.5
       Section 1032, subdivision (b) provides: “Except as
otherwise expressly provided by statute, a prevailing party is
entitled as a matter of right to recover costs in any action or
proceeding.” Section 1033.5 sets forth which items are allowable
as costs and which are not. To be allowable, costs must be
“reasonable in amount” and “reasonably necessary to the conduct
of the litigation rather than merely convenient or beneficial to its
preparation.” (§ 1033.5, subd. (c)(2)-(3).) Section 1033.5
specifically allows for many of the categories claimed by Colgate:
filing, motion, and jury fees; certain deposition costs; the cost of
models, blowups, and photocopies of exhibits if “reasonably
helpful to aid the trier of fact”; and court reporter fees. (§ 1033.5,
subd. (a).)



      4Colgate concurrently filed a petition for writ of mandate
on the same issue. We denied that petition, as it challenged an
appealable postjudgment order. (§ 904.1, subd. (a)(2).)



                                  8
       Generally, we review a trial court’s order taxing costs for
an abuse of discretion. (Posey v. State of California (1986) 180
Cal.App.3d 836, 852.) Absent a showing of abuse of discretion,
the trial court’s allowance or disallowance of costs will not be
disturbed on appeal. (Ibid.) However, whether a trial court may
consider a party’s ability to pay in awarding costs under the
statute is a question of law, which we review de novo. (See
Chaaban v. Wet Seal, Inc. (2012) 203 Cal.App.4th 49, 52.)
       In her motion to tax costs, Alfaro initially challenged all of
the costs as unsupported and unnecessary. She then withdrew
her objection to certain items based on supporting documentation
provided by Colgate. After the court raised the issue sua sponte,
Alfaro argued that the court could consider her inability to pay as
part of its assessment of the reasonableness of the costs. Colgate
countered that the court could not consider the losing party’s
ability to pay, citing Nelson v. Anderson (1999) 72 Cal.App.4th
111 (Nelson).
       We find Nelson instructive. Nelson and Anderson were the
cofounders and sole shareholders in a corporation engaged in a
business that eventually failed. (Nelson, supra, 72 Cal. App.4th
at p. 117.) Nelson and two other plaintiffs sued Anderson and
the corporation’s law firm. The two other plaintiffs settled with
the law firm before trial; the jury returned a verdict in favor of
the law firm and against Nelson. (Id. at p. 122.) The law firm
claimed costs of $278,000, but the trial court, upon Nelson’s
motion to tax, disallowed all but $25,000. (Id. at p. 128.) The
court disallowed two-thirds of the firm’s pretrial costs, reasoning
that the firm had waived the right to recover from the two
settling plaintiffs and it would be unfair to permit the law firm to
collect them from Nelson. (Ibid.) The court also agreed with




                                  9
Nelson “that it would be unfair to assess all [the firm’s] costs
against her, ‘[g]iven the disproportionate resources available to
Nelson.’” (Ibid.)
       The appellate court found that none of the bases used by
the trial court to reduce the allowable costs were authorized
under the statute. Absent statutory authority, “the court has no
discretion to deny costs to the prevailing party.” (Nelson, supra,
72 Cal. App.4th at p. 129, citing Crib Retaining Walls, Inc. v.
NBS/Lowry, Inc. (1996) 47 Cal.App.4th 886, 890.) To that end,
“‘[a] court should be cautious in engrafting exceptions onto the
clear language of . . . section 1032.’ [Citation.]” Nor should it
‘“read into the statute allowing costs a restriction which has not
been placed there.”’ (Nelson, supra, 72 Cal. App.4th at p. 129.)
       The court then examined whether the trial court could
consider Nelson’s “more limited resources” to support reducing a
cost award section 1032. Nelson argued it could, relying on
Santantonio v. Westinghouse Broadcasting Co. (1994) 25
Cal.App.4th 102 (Santantonio), a case awarding costs on an offer
to compromise under section 998.5 The Nelson court
acknowledged that “section 998 gives the trial court discretion to
consider a party’s ability to pay costs, when considering costs
recoverable under that section.” (Nelson, supra, 72 Cal. App.4th
at p. 129, citing Santantonio, supra, 25 Cal.App.4th 102.)
However, the appellate court disagreed that a court had the same
discretion under section 1032: “[t]here is no language in section
998 which would transfer the discretion of that section to a


      5 As we discuss further in Section II, post, a prevailing
party who has made a valid pretrial offer to compromise
pursuant to section 998 is eligible for specified costs, so long as
the offer was reasonable and made in good faith.



                                  10
motion to tax costs recoverable by the prevailing party under
sections 1032 and 1033.5, and unrelated to section 998.” (Nelson,
supra, 72 Cal.App.4th at p. 129; see also Heller v. Pillsbury
Madison & Sutro (1996) 50 Cal.App.4th 1367, 1397 [rejecting
losing party’s contention that the trial court abused its discretion
in not considering the parties’ respective financial positions in
awarding costs pursuant to section 1032].)
       Alfaro cites no authority, and we are aware of none, holding
that the language of section 1033.5 allowing costs that are
“reasonable in amount” and “reasonably necessary to the conduct
of the litigation” also confers authority for the court to analyze
whether costs are reasonable based on the losing party’s ability to
pay. Instead, the cases analyzing costs under the applicable
statutes focus on whether certain claimed costs were reasonable
or necessary. (See, e.g., Thon v. Thompson (1994) 29 Cal.App.4th
1546, 1549 [deducting the difference between chartered private
plane and commercial flight to attend depositions].)
       Further, the cases relied upon by Alfaro and the trial court
are distinguishable. Several concern the court’s authority to
protect an indigent plaintiff’s right of access to the court by
waiving fees and costs. (See Martin v. Superior Court, supra, 176
Cal. 289 [discussing court’s inherent power to waive court fees
and costs]; Sutter County v. Superior Court for Sutter County
(1966) 244 Cal.App.2d 770, 775 [court’s authority to exempt
indigent plaintiff from compliance with the statutory provision
for a cost bond in lawsuits against public entities].) Others, such
as Garcia v. Santana (2009) 174 Cal.App.4th 464, 477 (Garcia),
allow a court to consider an ability to pay as part of the lodestar
determination for a reasonable attorney fee award. In Garcia,
the court considered the language of former Civil Code section




                                11
1354, subdivision (c), part of the Davis–Stirling Common Interest
Development Act, providing: “‘In an action to enforce the
governing [homeowner’s association] documents, the prevailing
party shall be awarded reasonable attorney’s fees and costs.’”
(Garcia, supra, at p. 469.) The court concluded, “[i]n determining
the amount of fees to be awarded to the prevailing party where
the statute, as here, requires that the fee be reasonable, the trial
court must therefore consider the other circumstances in the case
in performing the lodestar analysis. Those other circumstances
will include, as appropriate, the financial circumstances of the
losing party and the impact of the award on that party.” (Id. at
pp. 476–477.) We note that the Garcia court cited to section 998
as another statute allowing consideration of the economic
circumstances of the parties, but did not reference sections 1032
or 1033.5, the statutes at issue here. (Id. at p. 476.) We are not
persuaded that the statutory language of the latter statutes
permits the same interpretation, nor that the imposition of
reasonable, enumerated costs as a matter of right threatens
litigants’ right of access to our courts. (See also Perez v. County of
Santa Clara (2003) 111 Cal.App.4th 671, 680–681 [“‘Whereas the
magnitude and unpredictability of attorney’s fees would deter
parties with meritorious claims from litigation, the costs of suit in
the traditional sense are predictable, and, compared to the costs
of attorneys’ fees, small.’”].)
       We conclude that Colgate is entitled to its allowable costs
under sections 1032 and 1033.5. Alfaro has conceded that certain
items are allowable; thus, Colgate is entitled to recover them as a
matter of right. With respect to the remaining items, the trial
court did not consider Alfaro’s challenges to specific costs or
assess which costs were reasonable in amount and reasonably




                                 12
necessary to the litigation. We therefore remand to allow the
trial court to make that determination in the first instance.
II.    Expert Fees Claimed Pursuant to Section 998
       Colgate also sought recovery of its expert witness fees
pursuant to section 998. “Under section 1033.5, subdivision
(b)(1), . . . parties may not recover expert witness fees as costs
‘except when expressly authorized by law.’ Such express
authorization exists” under section 998. (First Nationwide Bank
v. Mountain Cascade, Inc. (2000) 77 Cal.App.4th 871, 875-876.)
       Section 998 authorizes a prevailing party to recover its
costs from a losing party who rejected a reasonable, good faith
offer to compromise. (Nelson, supra, 72 Cal.App.4th at p. 134;
§ 998, subd. (c)(1).) Good faith requires the offer be “realistically
reasonable under the circumstances of the particular case,” and
carry with it a reasonable prospect of acceptance. (Wear v.
Calderon (1981) 121 Cal.App.3d 818, 821.) Further, recoverable
costs must have been “actually incurred and reasonably
necessary” to the preparation of the case. (§ 998, subd. (c)(1).)
       Whether a section 998 offer was reasonable and made in
good faith is left to the sound discretion of the trial court.
(Nelson, supra, 72 Cal.App.4th at p. 134.) “Similarly, the decision
to award expert witness fees, and the determination of whether
these fees were reasonably necessary, are issues left to the
discretion of the trial court.” (Adams v. Ford Motor Co. (2011)
199 Cal.App.4th 1475, 1484.) “The trial court, having heard the
entire case and observed the expert witnesses’ testimony, is in a
far better position than an appellate court to exercise this
discretion and determine what fees were reasonably necessary.”
(Id. at pp. 1484, 1488.) Thus, an appellate court ordinarily
should reverse the trial court’s determination only if it finds “in




                                 13
light of all the evidence viewed most favorably in support of the
trial court, no judge could have reasonably reached a similar
result.” (Id. at p. 1484.) Alternatively, an appellate court may
reverse the denial of statutorily authorized fees where the trial
court failed to exercise its discretion to determine whether the
requested fees were reasonable. (See Garcia, supra, 174
Cal.App.4th at p. 477 [“a trial court’s failure to exercise discretion
is ‘itself an abuse of discretion’”].)
        Here, there is no dispute that Alfaro failed to obtain a more
favorable result at trial than the offer to compromise. However,
the court expressly declined to reach the issue whether Colgate’s
section 998 offer was made in good faith, nor did it make any
findings as to whether that offer was reasonable, or whether the
requested expert witness fees were reasonably necessary to the
litigation.
        In contrast to the restrictions in section 1032, courts have
interpreted the discretionary authority in section 998 to allow the
consideration of a party’s ability to pay when determining the
appropriate recovery under that statute. (See Nelson, supra, 72
Cal.App.4th at p. 129; Santantonio, supra, 25 Cal.App.4th at p.
125, fn. 7 [“Section 998 . . . permits the trial court, via exercise of
discretion, to consider a party’s ability to pay costs.”]; see also
Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1561–
1562 [“If the goal of . . . section 998 is to encourage fair and
reasonable settlements--and not settlements at any cost--trial
courts in exercising their discretion must ensure the incentives to
settle are balanced between the two parties. Otherwise less
affluent parties will be pressured into accepting unreasonable
offers just to avoid the risk of a financial penalty they can’t
afford.”].) Alfaro thus argues that the trial court properly




                                  14
exercised its discretion in refusing to award any expert witness
fees based on her inability to pay.
       We disagree. Colgate was entitled to seek recovery of its
postoffer expert witness fees pursuant to section 998. In order to
properly exercise its discretion regarding what amount, if any, it
was reasonable for Alfaro to pay, the court was required to
consider all of the relevant factors. Thus, the court could
consider Alfaro’s financial circumstances, but it also should have
assessed whether the offer to compromise was reasonable and
made in good faith, and if so, whether the fees requested by
Colgate were incurred and reasonably necessary to the litigation.
Here, the trial court expressly declined to make these findings
and therefore failed to properly evaluate whether any award was
appropriate under section 998.
       We also note that while there was some evidence in the
record regarding Alfaro’s limited income and her mounting
medical expenses, there was insufficient evidence from which the
trial court could have found she lacked the ability to pay any cost
award. (See Villanueva v. City of Colton (2008) 160 Cal. App.4th
1188, 1204 [plaintiff must provide evidence of inability to pay,
such as “a declaration setting forth his gross income, his net
income, his monthly expenses, his assets, or any other
information which . . . would lend support to his position”].)
Indeed, the trial court made several statements to that effect
during oral argument, noting that while it seemed Alfaro had
limited finances, the court did not actually know the full extent of
her assets or income.
       We therefore remand to allow the trial court to exercise its
discretion in determining whether Colgate’s section 998 offer was
made reasonably and in good faith; and if so, the amount of any




                                 15
reasonably necessary expert witness fees. To the extent the
record contains sufficient evidence supporting a finding of
Alfaro’s inability to pay, the court is within its discretion to
consider that factor as well.
                           DISPOSITION
      Reversed and remanded. Colgate is awarded its costs on
appeal.
                  CERTIFIED FOR PUBLICATION



                           COLLINS, J.

We concur:




MANELLA, Acting P.J.




MICON, J.*




      *
       Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.



                                16
