City of Falls City v. Nebraska Mun. Power Pool
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City of Falls City, Nebraska, appellee and cross-appellee,
v. Nebraska Municipal Power Pool, a Nebraska nonprofit
corporation, appellant, J. Gary Stauffer et al.,
appellees and cross-appellants, Central P lains
Energy Project, appellee, and American P ublic
Energy Agency, intervenor-appellee.
___ N.W.2d ___
Filed March 18, 2011.
No. S-10-458.
1. Costs: Appeal and Error. The decision of a trial court regarding taxing of costs
is reviewed for an abuse of discretion.
2. Costs. Litigation costs are not recoverable by a party unless authorized by statute
or a uniform course of procedure.
3. Statutes: Legislature: Public Policy. It is the Legislature’s function through the
enactment of statutes to declare what is the law and public policy.
Appeal from the District Court for Lancaster County: Steven
D. Burns, Judge. Affirmed.
Daniel E. Klaus and David J.A. Bargen, of Rembolt Ludtke,
L.L.P., for appellant.
James P. Fitzgerald and James G. Powers, of McGrath,
North, Mullin & Kratz, P.C., L.L.O., for appellees J. Gary
Stauffer et al.
Robert W. Mullin and David S. Houghton, of Lieben,
Whitted, Houghton, Slowiaczek & Cavanagh, P.C., L.L.O.,
and Douglas E. Merz, of Weaver & Merz, for appellee City of
Falls City.
Heavican, C.J.,
McCormack, JJ.
Connolly,
Gerrard,
Stephan,
and
Stephan, J.
This case is before us for the second time. In this appeal,
we are asked to examine what costs a district court may tax and
how they should be apportioned in a case involving multiple
claims with differing resolutions.
See City of Falls City v. Nebraska Mun. Power Pool, 279 Neb. 238, 777
N.W.2d 327 (2010).
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FACTS AND PROCEDURAL BACKGROUND
In October 2006, the City of Falls City (Falls City) filed a
complaint against the Nebraska Municipal Power Pool (NMPP),
five individuals who were officers or employees of NMPP or
its related entities, and Central Plains Energy Project (CPEP).
A detailed summary of the factual basis for the suit is included
in our previous opinion. Falls City alleged, summarized, that
NMPP breached a contract with an interlocal agency created
in order to secure natural gas for participating municipalities,
including Falls City, and that the individual defendants violated
fiduciary duties to individual members of the agency, including
Falls City, by their involvement in the formation of CPEP. Prior
to trial, CPEP’s motion for summary judgment was sustained,
but it thereafter remained a party to the action because of Falls
City’s request for equitable relief against the other parties,
which might have entailed CPEP’s participation. CPEP is not a
party to this appeal.
In February 2007, the American Public Energy Agency
(APEA) was granted leave to intervene as a plaintiff in order
to file a complaint against J. Gary Stauffer and Evan Ward,
two of the individual defendants. An 11-day trial occurred in
May 2008. At the conclusion of the trial, the district court dismissed all claims against two of the individual defendants, Ron
Haase and Chris Dibbern, but awarded a money judgment of
approximately $477,000 in favor of Falls City against NMPP,
Stauffer, Ward, and John Harms. The court awarded another
judgment of approximately $150,000 in favor of Falls City
against NMPP. APEA was awarded a judgment of approximately $3.2 million against Stauffer and Ward. And, although
APEA had not asserted a claim against NMPP, the judgment
ordered NMPP to disgorge approximately $220,000 received
from CPEP by paying this amount to APEA. The court also
awarded other equitable relief.
During the pendency of an appeal, NMPP, Stauffer, and
Ward entered into a settlement with APEA. Pursuant to the
settlement, APEA received $2.25 million and in return released
Id.
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all claims against NMPP, Stauffer, Ward, Harms, and others.
Each party agreed to pay its own costs and attorney fees.
After the settlement with APEA, the appeal proceeded to this
court with NMPP and the individual defendants challenging the
judgment in favor of Falls City. We determined that Falls City
lacked standing to assert its claims against NMPP and the individual defendants and therefore reversed, and remanded to the
district court with directions to dismiss. Upon receipt of our
mandate, the district court entered an order stating that the matter was “dismissed with costs assessed to [Falls City].”
NMPP and the five originally named individual defendants
then filed motions for taxation of costs. Included in NMPP’s
motion was a request for taxation of the cost of obtaining deposition copies, of videotaping depositions, and of electronically
displaying trial testimony and exhibits. Included in the individual defendants’ motion was a request for taxation of the costs
of obtaining deposition copies and of videotaping depositions.
Falls City filed objections to the motions. The district court
conducted an evidentiary hearing at which it received affidavits
in support of the motions.
On April 5, 2010, the district court entered a written order
awarding costs. The court first determined that only those
costs which were authorized by statute or historical procedure
could be taxed. These included filing fees, sheriff service fees,
witness fees, mileage paid to a witness to secure the witness’
appearance on a subpoena, original deposition costs, and the
cost of the bill of exceptions on appeal. The court concluded
that the requested costs associated with obtaining deposition
copies, videotaping depositions, and electronically displaying
trial testimony and exhibits were not taxable.
The district court then addressed the apportionment of taxable costs among the parties in light of the APEA settlement
during the pendency of the first appeal. The court generally
reasoned that considering the APEA settlement and the judgment in favor of Falls City together, APEA had received about
78 percent of the total amount awarded and Falls City had
Id.
Id.
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received about 22 percent (prior to our reversal of the judgment in favor of Falls City). Because the court found that
there was “no evidence that any of the taxable costs requested
. . . were incurred solely due to the Falls City litigation,” the
court concluded that Falls City should be responsible for 22
percent of the taxable costs claimed by NMPP and the individual defendants.
NMPP filed this timely appeal, contesting both the items
considered to be properly recoverable as costs and the apportionment of costs. The five individuals originally named as
defendants cross-appealed and raised the same issues.
ASSIGNMENTS OF ERROR
Appellant NMPP assigns, restated and consolidated, that
the district court erred in (1) determining that only those costs
prescribed by statute or a uniform course of procedure are
recoverable and (2) reducing the costs it could recover based
on the claims asserted by APEA. The individual defendants
(hereinafter cross-appellants) assign the same errors.
STANDARD OF REVIEW
[1] The decision of a trial court regarding taxing of costs is
reviewed for an abuse of discretion.
ANALYSIS
Determination of Taxable Costs
Neb. Rev. Stat. §§ 25-1708 (Cum. Supp. 2010) and 25-1710
(Reissue 2008) govern the taxation of court costs in specified types of actions, but taxation of costs in equitable actions
such as this is governed by Neb. Rev. Stat. § 25-1711 (Reissue
2008). Section 25-1711 provides in part: “In other actions
the court may award and tax costs, and apportion the same
between the parties on the same or adverse sides, as in its
discretion it may think right and equitable.” Like §§ 25-1708
and 25-1710, § 25-1711 generally states when a court may tax
Teadtke v. Havranek, 279 Neb. 284, 777 N.W.2d 810 (2010).
See, generally, id.; R & S Investments v. Auto Auctions, 15 Neb. App. 267,
725 N.W.2d 871 (2006).
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costs but does not specify what costs are taxable. We have long
held that costs of litigation and expenses incident to litigation
may not be recovered unless provided for by statute or a uniform course of procedure. Applying this principle, we have
held that expert witness fees and expenses of making copies
of depositions and enlargements of exhibits are not taxable
court costs. The Court of Appeals has applied this principle
in holding that photocopy, fax, and postage expenses are not
taxable costs.10
NMPP and the cross-appellants argue that our jurisprudence
on the issue of what litigation expenses may be taxed as court
costs does not reflect the realities of modern litigation and
should be expanded. They ask that we establish guidelines for
the lower courts to use in taxing costs based upon a standard
of reasonability and note that other courts have specifically
approved taxation of the types of costs which were disallowed
by the district court in this case.
[2] We begin our discussion of taxable costs with an 1872
case, where this court stated:
Costs are unknown to the common law. They are given
only by statute, which may be changed at the will of the
legislature. The recovery of costs must depend upon the
statute law in force at the time the judgment was rendered.
. . . The right to costs is a statutory right, and cannot be
enlarged by judicial authority.11
At times, our jurisprudence has strayed somewhat from this
categorical statement. For example, in Kasparek v. May,12 a
10
11
12
Bartunek v. Gentrup, 246 Neb. 18, 516 N.W.2d 253 (1994); Kliment v.
National Farms, Inc., 245 Neb. 596, 514 N.W.2d 315 (1994); Nat. Bank of
Commerce Trust & Savings Assn. v. Rhodes, 207 Neb. 44, 295 N.W.2d 711
(1980).
Bartunek v. Gentrup, supra note 7; Kliment v. National Farms, Inc., supra
note 7.
Kliment v. National Farms, Inc., supra note 7.
In re Estate of Snover, 4 Neb. App. 533, 546 N.W.2d 341 (1996).
Geere v. Sweet, 2 Neb. 76, 76-77 (1872).
Kasparek v. May, 178 Neb. 425, 133 N.W.2d 614 (1965).
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civil contempt action, this court concluded that under the facts
and circumstances of that case, the trial court did not err in
refusing to tax postage, mileage expenses, and other miscellaneous expenses as costs. Admittedly, the language used in
Kasparek suggests that the trial court would have had discretionary authority to tax such expenses as costs under different
facts and circumstances. But since 1980, we have adhered to
the principle that litigation costs are not recoverable by a party
unless authorized by statute or a uniform course of procedure.13
We acknowledge that a “uniform course of procedure” which
did not exist in 1980 could never develop under the principle
we have applied since then. Thus, we are essentially back to
where we started, recognizing that it is within the province of
the Legislature to designate specific items of litigation expense
which may be taxed as costs. We are not persuaded that we
should abandon this principle.
[3] As the cross-appellants acknowledge in their reply brief,
“[t]his appeal presents a policy issue for this Court, i.e.,
whether to allow district courts to consider additional elements
as taxable costs.”14 Shifting of litigation expenses from one
party to another could have “a chilling effect on a plaintiff’s
right to seek relief for injury or wrong” or subject an unsuccessful defendant to costs “greatly in excess of the monetary
relief sought by the plaintiff.”15 It is the Legislature’s function
through the enactment of statutes to declare what is the law and
public policy.16 And in fact, the Legislature has done so with
respect to certain court costs. For example, statutes authorize
the taxation of costs associated with executed orders of attachment,17 answers filed to garnishment interrogatories,18 replevin
13
14
15
16
17
18
See Nat. Bank of Commerce Trust & Savings Assn. v. Rhodes, supra
note 7.
Reply brief for appellees on cross-appeal at 9.
Bartunek v. Gentrup, supra note 7, 246 Neb. at 21, 516 N.W.2d at 255.
See, Stewart v. Bennett, 273 Neb. 17, 727 N.W.2d 424 (2007); In re Claims
Against Atlanta Elev., Inc., 268 Neb. 598, 685 N.W.2d 477 (2004).
Neb. Rev. Stat. § 25-1005 (Reissue 2008).
Neb. Rev. Stat. § 25-1026 (Reissue 2008).
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orders,19 service of process,20 and the completion of records in
concluded district court cases.21
Although federal courts have held that the costs at issue in
this case are taxable, they have done so not on their own authority but pursuant to 28 U.S.C. § 1920 (2006 & Supp. III 2009),
which lists general categories of litigation expense which may
be taxable as costs. These include “[f]ees for printed or electronically recorded transcripts necessarily obtained for use in
the case” and “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily
obtained for use in the case.”22 Federal courts have construed
the former provision as authorizing taxation of the cost of
deposition copies23 and, when read in conjunction with Fed. R.
Civ. P. 30(b), the cost of videotaping depositions.24 Similarly,
federal courts have held that the cost of electronic display of
trial exhibits is a form of “‘exemplification,’” the costs of
which may be taxed pursuant to § 1920(4).25
The parties direct us to no Nebraska statute or any “uniform
course of procedure” authorizing the taxation of such costs,
and we are aware of none. We therefore conclude that the district court correctly determined that its discretion to tax costs
under § 25-1711 did not include authority to tax the costs of
obtaining deposition copies, videotaping depositions, or presenting evidence electronically. As to NMPP’s argument that
litigation practice has changed dramatically over the years and
thus the rules for taxation of costs should change accordingly,
we conclude that it presents a policy question which is properly
left to the Legislature.
19
Neb. Rev. Stat. § 25-10,107 (Reissue 2008).
Neb. Rev. Stat. § 25-507(4) (Reissue 2008).
21
Neb. Rev. Stat. § 33-106(3) (Reissue 2008).
22
28 U.S.C. § 1920(2) and (4).
23
See, Independent Iron Works, Inc. v. United States Steel Corp., 322 F.2d
656 (9th Cir. 1963); United States v. Kolesar, 313 F.2d 835 (5th Cir.
1963).
24
See, Craftsmen Limousine, Inc. v. Ford Motor Co., 579 F.3d 894 (8th Cir.
2009); Tilton v. Capital Cities/ABC, Inc., 115 F.3d 1471 (10th Cir. 1997).
25
See Cefalu v. Village of Elk Grove, 211 F.3d 416, 427 (7th Cir. 2000).
20
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Apportionment of Taxable Costs
Section 25-1711 authorized the district court to apportion
taxable costs “between the parties on the same or adverse
sides, as in its discretion it may think right and equitable.”
NMPP and the cross-appellants contend that the district court
abused its discretion in apportioning only 22 percent of the taxable court costs to Falls City.
This complex litigation involved two claimants, Falls City
and APEA. At the conclusion of trial, the district court awarded
APEA a judgment of approximately $3.2 million against
Stauffer and Ward and a judgment of approximately $220,000
against NMPP. Falls City was awarded a judgment of approximately $477,000 against NMPP, Stauffer, Ward, and Harms, and
another judgment of approximately $150,000 against NMPP.
Thus, APEA was awarded a total of about $3.5 million and
Falls City was awarded a total of about $628,000. As a result
of the settlement, APEA received $2.25 million, and as a
result of the first appeal, the judgment in favor of Falls City
was vacated. Three of the five originally named individual
defendants emerged from the litigation unscathed; Dibbern and
Haase were dismissed at the close of trial, and Harms’ liability
to Falls City was extinguished as a result of the first appeal.
APEA made no claim against these individuals.
The district court concluded that “all the costs incurred were
the result of both claims.” NMPP does not dispute this, but
argues that its costs should not have been apportioned between
the two claims, because APEA never asserted a claim against
it. While that is true, it is also the case that APEA obtained
a judgment against NMPP which was eventually resolved by
a settlement in which NMPP participated. On these facts, it
was entirely reasonable for the district court to conclude that
NMPP did not prevail with respect to the APEA claim, which
was settled with each party agreeing to bear its own costs. We
conclude that the district court did not abuse its discretion by
taking the APEA judgment and settlement into account and in
arriving at the percentage of such costs which should be borne
by Falls City.
The cross-appellants contend that the cost apportionment
was flawed because it was “premised upon a valid damage
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award”26 in favor of Falls City which was in fact vacated by
the first appeal. We find no merit in this argument. The district
court properly considered the judgment in favor of Falls City
in determining its percentage relationship to the entire amount
of the judgments initially awarded, and then taxed that percentage of the costs against Falls City because it “failed to carry its
claim and it should bear the costs associated with it.” Dibbern
and Haase also argue that their costs should not have been
apportioned because they were never sued by APEA. But they
do not challenge the finding of the district court that they did
not incur any costs which were unique to them and separate
from those incurred by Stauffer and Ward.
In sum, the district court provided a reasoned and logical
explanation for the manner in which it apportioned the costs
taxed against Falls City. It did not abuse its discretion.
CONCLUSION
For the reasons discussed, we affirm the judgment of the
district court.
Affirmed.
Wright and Miller-Lerman, JJ., not participating.
26
Brief for appellees on cross-appeal at 16.
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