Net Monetary Recovery

Desaulles v. Cmty. Hosp. of the Monterrey Peninsula, No. H038184 (D6 May 2, 2014)

In a settlement in an employment case, the employer case agreed to pay the employee $23,500 in exchange for dismissal of two of her claims, and the entry of a judgment awarding nothing, which would supposedly permit plaintiff to appeal some unfavorable in limine rulings that effectively gutted the rest of her case. The question is: For the purpose of awarding costs, who was the prevailing party? Is the plaintiff who got a settlement or the defendant who got a judgment that says plaintiff takes nothing? Because the parties’ agreement was silent as to costs, the issue comes down to Code of Civil Procedure § 1032(a)(4) which defines a prevailing party for cost purposes as, among other definitions, “the party with a net monetary recovery.”  Unsurprisingly—at least to me, given that the case ended with plaintiff in possession of a pile of defendant’s money—the court concludes that a plaintiff who received money in exchange for a dismissal and a stipulated judgment for no relief did, in fact, receive a net monetary recovery and was thus entitled to its costs as the prevailing party. But only after wading through a confusing body of precedent on the issue.

Reversed.

**Note: Review granted July 23, 2014.