Civil Practice – Costs – Mandatory Award – Negligence Action – Prevailing Party

Khomyak v. Meek (Lawyers Weekly No. 11-07-0786, 27 pp.) (Douglas McCullough, J.) (Linda M. McGee, J., concurring in the result only without separate opinion) Appealed from Mecklenburg County Superior Court. (Timothy L. Patti, J.) N.C. App. Click here for the full-text opinion.

Holding: If we were writing on a clean slate, we would affirm the trial court’s award of costs to the prevailing defendants in the amount of only $1,000, although they requested $15,599. However, recent decisions by this court require us to rule that the trial court lacked discretion to deny certain costs.

We reverse the trial court’s award of $1,000 in costs and remand for reconsideration in light of Springs v. City of Charlotte, 704 S.E.2d 319 (2011).

In this medical negligence action, the jury found in favor of defendants. Defendants moved for an award of $15,599 in costs under G.S. §§ 6-20 and 7A-305(d). The trial court awarded only $1,000, and defendants appeal.

Standard of Review

Peters v. Pennington, 707 S.E.2d 724 (2011), held, “Whether a trial court has properly interpreted the statutory framework applicable to costs is a question of law reviewed de novo on appeal. The reasonableness and necessity of costs is reviewed for abuse of discretion.”

The trial court correctly determined that G.S. §§ 6-20 and 7A-305(d) are the applicable statutes governing the taxing of costs in the present case. However, because of certain recent decisions of this court, the trial court is afforded no discretion in determining whether or not to award those costs enumerated under § 7A-305(d); therefore, the trial court must impose the costs requested by defendant, if they were reasonable and necessary.

Taxing Costs

At issue is a trial court’s discretion to decide whether to award costs under G.S. § 6-20.

Prior to 2007, some of this court’s opinions gave the trial court discretion under G.S. § 6-20 to assess not only those “statutory” costs enumerated in ¤ 7A-305(d), but also costs which were traditionally allowed at common law. Other opinions said the trial court could only assess those costs enumerated by statute.

The General Assembly resolved this dispute by amending §§ 6-20 and 7A-305(d) in 2007 to allow only those costs specifically authorized by statute.

Smith v. Cregan, 178 N.C. App. 519, 632 S.E.2d 206 (2006), addressed “whether the General Statutes always require [a statutorily enumerated cost under § 7A-305(d)] to be awarded to a prevailing party in a negligence action.”

Smith holds that, for actions governed by § 6-20, such as negligence actions like the present case, the trial court has the discretion to determine whether or not to award costs to the prevailing party, and if the  trial court chooses to exercise that discretion, then the trial court is confined to those costs expressly enumerated under § 7A-305(d) or any other statute.

Smith has never been overturned by our Supreme Court, and because that decision addresses the precise circumstances of the present case, Smith should be controlling here. However, this court’s decision in  Priest v. SafetyKleen Sys., Inc., 191 N.C. App. 341, 663 S.E.2d 351 (2008), disagrees with Smith‘s holding. Priest holds that, in a negligence action, costs enumerated in § 7A-305(d) “must be awarded to the prevailing party.”

In attempting to distinguish Smith by the “greater weight of authority,” Priest relied on two distinguishable cases – Lord v. Customized Consulting Specialty, Inc., 164 N.C. App. 730, 596 S.E.2d 891 (2004), and Morgan v. Steiner, 173 N.C. App. 577, 619 S.E.2d 516 (2005) – in which specific rules of civil procedure, rather than § 6-20, determined both the issue and the outcome.

Moreover, Miller v. Forsyth Memorial Hospital, Inc., 173 N.C. App. 385, 618 S.E.2d 838 (2005), incorrectly applied the analysis of Lord, as

Lord‘s holding was decided under the context of N.C. R. Civ. P. 41(d) imposing mandatory costs, rather than under the discretionary provisions of § 6-20 applicable to negligence actions resulting in a jury verdict.

Consequently, given its reliance on Lord, Morgan, and Miller, Priest was inconsistent with this court’s prior authority.

However, relying on Priest, this court issued our decision in Springs in January of this year.

Springs involved a negligence action. This court held that those costs enumerated in ¤ 7A-305(d) are mandatory costs that must be awarded by the trial court to the prevailing party. Springs further holds that the trial court has discretion to award other costs that are specifically authorized by statutes other than ¤ 7A-305(d).

In March of this year, this court’s opinion in Peters v. Pennington,

707 S.E.2d 724 (2011), relied on Springs and Priest, and again holds, “If a category of costs is set forth in § 7A-305(d), the trial court is required to assess the item as costs.”

Although Springs follows this court’s precedent in Priest, we find such an interpretation of §§ 6-20 and 7A-305(d) effectively divests the trial court of a significant amount of the discretion given to the trial court by the plain language of those statutes.

After the General Assembly amended it in 2007, § 6-20 allows a trial court to award only those costs set forth in § 7A-305(d) or other statutes. Noticeably absent is any language requiring the trial court to assess those costs listed in § 7A-305(d). Rather, the plain language simply limits a trial court’s discretion to award only those costs specifically provided for under § 7A-305(d) or elsewhere in the General Statutes.

The legislature’s evident purpose in amending the statute was only to eliminate the divergent path in our case law which allowed assessment of “common law” costs in addition to statutorily enumerated costs.

Before the 2007 amendment, our decisions in cases addressing § 6-20, with the exception of Miller, are consistent in holding, either directly or impliedly, that § 6-20 vests the trial court with discretion to determine whether to grant any costs to a prevailing party in an action not governed by G.S. § 6-18 or § 6-19, or a rule of civil procedure which provides for a mandatory awarding of costs.

If we are to construe the statutes as mandated by our holdings in Priest and Springs, the viability of § 6-20 will be severely diminished, as the trial court will be required to assess the items enumerated as costs in ¤ 7A-305(d) whenever a prevailing party files a motion for costs, thereby effectively eliminating much of the discretion provided by § 6-20. Such a reading is not consistent with our rules of statutory construction.

Were we writing on a clean slate, unbound by Priest and Springs, we would affirm the decision of the trial court in exercising its discretion whether to award costs to the prevailing party based on our statutory analysis and the consistent holdings in our case law prior to Priest. However, because we are bound by Priest and Springs on this issue, we apply those holdings to the circumstances of the present case.

G.S. § 7A-305(d)(10) requires the trial court to assess “reasonable and necessary expenses for stenographic and videographic assistance directly related to the taking of depositions and for the cost of deposition transcripts.”

Also, under G.S. § 7A-305(d)(11), the trial court is required to assess “reasonable and necessary fees of expert witnesses solely for actual time spent providing testimony at trial, deposition, or other proceedings.” The trial court is to consider, in its discretion, whether the costs requested under G.S. § 7A-305(d)(10) and (11) are reasonable and necessary.

The trial court also may consider in its discretion whether to award expert fees for an expert witness’ time in attendance at trial even when not testifying and travel expenses for experts according to G.S. ¤ 7A-314.

From the record, we are unable to determine whether the trial court properly considered the mandatory costs as required by Springs. Therefore, we must reverse the trial court’s award of costs in the amount of $1,000 and remand for reconsideration in light of the controlling statutes as interpreted by this court in Springs.

Reversed and remanded.