Gallardo et al v. USA et al

Filing 234

ORDER granting 204 Plaintiffs' Objection to Taxation of Costs. Each party shall bear its own costs. By Judge Philip A. Brimmer on 2/12/13.(mnfsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 10-cv-00868-PAB-CBS
MARIA GALLARDO and
D.R.G., a minor child by and through
her natural mother and next best friend, MARIA GALLARDO,
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.
_____________________________________________________________________
ORDER
_____________________________________________________________________
This matter is before the Court on Plaintiffs’ Objection to Taxation of Costs
[Docket No. 204].
Plaintiffs Maria Gallardo and her minor daughter, D.R.G., brought this case
against the United States of America (“United States”) and the City of Colorado Springs,
Colorado,1 pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680. Ms.
Gallardo alleged that medical staff at Memorial Hospital in Colorado Springs were
negligent in delivering D.R.G. and, as a result, she was born with permanent disabling
brain damage. Amended Complaint [Docket No. 88]. After a ten-day bench trial, the
Court found that the United States had not breached the standard of care and thus was
not liable for D.R.G.’s injuries. Docket No. 192 at 30. The Court entered judgment in
favor of the United States and awarded costs. Final Judgment [Docket No. 193] at 1.
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On July 8, 2011, all claims against Colorado Springs were dismissed with
prejudice pursuant to a settlement agreement. Docket No. 92.

The United States submitted a proposed bill of costs [Docket No. 194], which the Clerk
of Court taxed against plaintiffs in the amount of $19,547.46 [Docket No. 199].
Plaintiffs filed timely objections to the taxation of costs.2 Docket No. 204.
Federal Rule of Civil Procedure 54(d)(1) states that, “unless a federal statute,
these rules, or a court order provides otherwise, costs–other than attorney’s
fees–should be allowed to the prevailing party.” This rule creates a presumption that
the district court will award the prevailing party its costs, placing the burden on the nonprevailing party seeking to overcome the presumption. Rodriguez v. Whiting Farms,
Inc., 360 F.3d 1180, 1190 (10th Cir. 2004). “When a district court exercises its
discretion and denies costs to a prevailing party, it must provide a valid reason for the
denial.” Id. Other circuits have held that a district court does not abuse its discretion in
denying costs when (1) the prevailing party was obstructive and acted in bad faith
during the course of litigation; (2) only nominal damages are awarded; (3) the issues
were close and difficult; (4) the costs are unreasonably high or unnecessary; or (5) the
non-prevailing party is indigent. Id. (internal citations omitted).
Plaintiffs argue that the Court should deny costs because they are indigent and
because the issues in the case were close and difficult. Docket No. 204 at 1. Plaintiffs
submitted an affidavit [Docket No. 209-2] indicating that Ms. Gallardo’s sole monthly
income is $503.00 in supplemental security income and $360.00 in food stamps.3 This

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The Court construes this filing as a motion for review of the taxation of costs
pursuant to Federal Rule of Civil Procedure 54(d)(1).
3

An earlier affidavit incorrectly listed $360.00 as a weekly benefit when it is
actually a monthly benefit, see Docket No. 200, but this error was corrected. See
Docket No. 209-2 at 2.
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income must cover all expenses for Ms. Gallardo and her other school-age daughter,
other than rent and utilities, which are paid by a special needs trust that was created for
D.R.G. from the proceeds of plaintiffs’ settlement. See Order Creating Trust and for
Transfer of Settlement to Trust [Docket No. 209-1] at 1. The United States argues that
this evidence is insufficient to show that plaintiffs are unable to pay costs. Docket No.
207 at 3-6.
First, the United States argues that, because plaintiffs did not submit the terms of
the trust with their objections, there is no evidence that they would be unable to pay the
costs out of the trust estate. Docket No. 207 at 3. Plaintiffs responded by filing a copy
of the trust’s terms with their reply brief. Docket No. 209-1. The trust states that it was
created for the “sole benefit” of D.R.G., Docket No. 209-1 at 3, art. 1.00, and that all
distributions from the trust must be “in the best interests of the Beneficiary.” Docket No.
209-1 at 4-5, § 5.02(b). In addition, the terms of the trust establish that the trust estate
is inalienable:
No beneficiary shall have any right to anticipate, sell, assign, mortgage,
pledge or otherwise dispose of or encumber all or any part of the trust estate
nor shall any part of the trust estate including income, be liable for the debts
or obligations, including alimony, of any beneficiary or be subject to
attachment, garnishment, execution, creditor’s bill or other legal or equitable
process.
Docket No. 209-1 at 7, § 9.02. According to its terms, the trust is not to be liable on any
debt incurred by D.R.G. and thus it appears that the United States may not enforce any
obligation to pay costs against the trust.
The United States’ second argument is that plaintiffs’ affidavits do not establish
that they are indigent. Docket No. 207 at 4-5. Specifically, the United States argues
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that the affidavits indicate that Ms. Gallardo has $453 “extra per month, after all bills are
paid.” Docket No. 207 at 5. However, this “extra” money must cover all other family
expenses. See Docket No. 209 at 2 (“This does not include any money for clothing,
washing clothes, haircuts, household supplies, or school supplies for the middle
daughter. It does not include any money beyond the $360 in food stamps for food.”).
Taking into account the expenses of a mother raising a daughter, plaintiffs have
demonstrated they do not have “extra” money.
The United States further argues that Ms. Gallardo could use D.R.G.’s trust to
pay a caretaker and thus that her “decision not to work is a choice, not a requirement.”
Docket No. 207 at 5-6. However, evidence at trial established that D.R.G. is in need of
continuous care and that Ms. Gallardo has encountered difficulties in finding providers
who can care for D.R.G. in the way she is able to look after her daughter’s needs. The
value of Ms. Gallardo’s care as compared to what she could earn in outside income,
given her lack of education and limited English, is disproportionate to the cost of
replacing her services with third party care paid for through the trust. The result of her
working outside the home would be the rapid depletion of the trust’s corpus.
As the Court finds that plaintiffs are indigent, it is within the Court’s discretion to
deny an award of costs. See Cantrell v. Int’l Bhd. of Elec. Workers, 69 F.3d 456, 459
(10th Cir. 1995).
For the foregoing reasons, it is
ORDERED that Plaintiffs’ Objection to Taxation of Costs [Docket No. 204] is
GRANTED. It is further

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ORDERED that each party shall bear its own costs.

DATED February 12, 2013.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

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