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Plaintiff Rostack Investments, Inc. obtained a summary

judgment against defendant Angela Sabella in an amount

exceeding $50 million. We reversed the judgment on appeal, and

awarded Sabella her costs as prevailing party. Sabella’s

memorandum of costs sought to recover approximately $1.4

million in costs related to her obtaining a surety bond, secured by

a letter of credit, pending the appeal. Rostack moved to tax those

costs, on the basis that they were neither reasonable nor

necessary, in that Sabella had sufficient assets to obtain a cashcollateralized

bond (without needing a letter of credit). The trial

court denied the motion to tax, concluding that Sabella’s bondrelated

expenses were both reasonable and necessary. The court

entered judgment against Rostack for the full amount of the

disputed costs, and Rostack appeals. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Underlying Dispute1

Rostack brought suit against Sabella for breach of contract,

based on a note with outstanding principal of over $28 million.

In Rostack’s operative complaint, it sought unpaid principal and

interest, as well as attorney fees and costs of collection, based on

an attorney fees/legal expenses clause in the note.

Sabella’s answer raised, among other things, the defense of

gift. Sabella argued that the note had simply memorialized an

intra-family loan from her multi-billionaire father via Rostack, a

corporate entity he had wholly controlled. Sabella believed her

father never intended her to use her own assets to repay the loan,

and had, in fact, given her the gift of loan forgiveness prior to his



1 Our discussion of the parties’ dispute and its procedural

history is taken from our opinion in the prior appeal. (Rostack

Invs., Inc. v. Sabella (Dec. 15, 2016, B260844) [nonpub. opn.].)

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death. Sabella took the position that it was her sister, who had

since taken control of Rostack, who was pursuing this action

against Sabella out of vengeance.

After a great deal of procedural wrangling, the trial court

concluded that Sabella could not pursue the gift defense, and

entered summary judgment in favor of Rostack, in the amount of

$51,906,128.62, plus costs and attorney fees. Sabella appealed

and we reversed, concluding the trial court erred both

procedurally and substantively in disposing of Sabella’s gift

defense. As Sabella was the prevailing party on appeal, our

disposition stated that Rostack was to pay her costs on appeal.

The remittitur issued February 15, 2017.

2. Sabella’s Appeal Bond

The record in the current appeal reveals the following

course of events occurred after the trial court’s judgment in favor

of Rostack, while Sabella’s appeal was pending.

Unless an undertaking is given, the perfecting of an appeal

does not stay enforcement of a judgment for money damages.2

(Code Civ. Proc., § 917.1, subd. (a)(1).) Initially, Sabella asked

Rostack if it would voluntarily stipulate to waiving the bond

requirement and agree to not pursue collection pending appeal.

Rostack declined. However, the parties stipulated to several

stays of enforcement of judgment, while Sabella investigated

various alternatives for obtaining an appeal bond.

An undertaking “shall be for double the amount of the

judgment . . . unless given by an admitted surety insurer in

which event it shall be for one and one-half times the amount of



2 The statutes provide that the terms “undertaking” and

“bond” may be used interchangeably. (Code Civ. Proc.,

§ 995.210.)

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the judgment . . . .” (Code Civ. Proc., § 917.1, subd. (b).) Even

using an admitted surety insurer, as Sabella did, would require a

bond in an amount exceeding $77 million.

The bulk of the evidence regarding Sabella’s investigation

of alternatives consists of several email threads between

Sabella’s attorneys and Amy Mea, a representative of Bond

Services Insurance Agency and Brokerage, LLC. Even before the

judgment was entered, Sabella’s counsel had started asking Mea

about different bond premium rates. Mea explained that the rate

quote depended on the type of collateral provided, whether a

letter of credit, securities, real estate, or something else.

Sabella’s counsel asked for “a range of options regarding the

collateral,” and suggested that Sabella “may be willing to do a cd

[presumably, certificate of deposit] or something with the full

amount in it.” Mea consulted with different sureties, and found

one which would charge as little as four-tenths of 1 percent on a

bond with a cash deposit.

3

While Mea was researching rates for a cash deposit,

Sabella’s counsel was also requesting information on the

procedure, and costs, involved in securing the bond with a letter

of credit, real property, or securities. Mea explained that with

real property, the bond premium is generally 4 percent of the

bond amount plus appraisal fees; and with securities, the

premium is 3-5 percent of the bond amount. However, the cost



3 At different times, Mea quoted different rates from

different sureties. Because the amount of the bond was so high,

some sureties were willing to negotiate on the rate to get the

business.

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for a bond secured by a letter of credit would be the same lower

premium as for a bond secured by cash.

By early December 2014, Sabella’s counsel said that she

was “likely” to obtain a bond secured by a letter of credit. There

followed a different series of e-mails, in which Sabella’s counsel

and Mea tried to agree on the bank from which Sabella would

obtain the letter of credit. Some of the banks Sabella proposed

were not acceptable to the sureties for a letter of credit that large.

Other proposed banks were unacceptable because they were

foreign institutions, while the sureties required FDIC-insured

U.S. lenders. Even when the bank was acceptable to the surety,

the premium the surety would charge varied, depending on the

bank.4

Apparently frustrated by her inability to get a low enough

premium rate for a bond secured by a letter of credit from a bank

acceptable to Sabella, Sabella’s counsel again reopened discussion

about simply securing the bond with a cash deposit. Mea found a

surety which would charge 0.25 percent premium for the bond

secured by full cash collateral, and would pay 0.5 percent interest

on the deposit. This arrangement would net Sabella 0.25 percent

interest on her deposit, but would tie up $77 million in cash for

the duration of the appeal. Sabella’s counsel asked Mea if there

was any way she could “improve upon these rates based on the

size of the deposit?” There was not.

Sabella ultimately obtained a bond secured by a letter of

credit. The annual premium on the bond was approximately



4 We observe that this is the rate that the surety would

charge for the appeal bond itself; Sabella would also be

responsible for any interest her bank charged in connection with

the issuance of the letter of credit.

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0.3 percent of the bond amount. The cost for the letter of credit

was 0.6 percent of the same amount.

3. Proceedings on the Motion to Tax Costs

Following our remittitur, Sabella sought her appellate

costs, including the bond and letter of credit premiums she had

paid for two years, in the total amount of nearly $1.4 million.

Rostack moved to tax several items of Sabella’s costs; the

only ones at issue in this appeal are the bond and letter of credit

premiums. Rostack argued these expenses were not reasonably

nor necessarily incurred. Rostack’s position was that the e-mail

thread, and Sabella’s substantial wealth, established that Sabella

had the financial wherewithal to obtain a cash-collateralized

bond, which would have (1) obviated the need for a letter of credit

and (2) netted Sabella 0.25 percent interest in excess of the bond

premium.5 Rostack argued that Sabella instead “obtained a Bond

in what appears to be the most expensive way possible.” It

argued, “Sabella can squander her funds if she wishes. But she

cannot do so and demand that her opponent [pay] for her

extravagance.”

Sabella opposed the motion, supporting her opposition with

her own declaration, stating that she chose to secure the

judgment with a bond collateralized by a letter of credit because

it “was the most economically advantageous for me because it



5 Rostack also argued that Sabella could have “offered

Rostack a security interest in some of her tens of millions of

dollars in assets and thereby avoid reliance on surety bonds.”

Rostack does not pursue this argument on appeal. We believe

that, just as Rostack was not obligated to simply refrain from

collection based on Sabella’s good faith, Sabella was not obligated

to offer her litigation adversary a security interest in her own

property.

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was the least expensive and most feasible” option. She explained

that prior to obtaining the bond, she and her advisors “diligently

investigated and considered all the various bond options.” As for

the cash-collateral alternative, Sabella stated that, although she

inquired about the costs involved, she “ultimately determined

that it was not feasible or economically sound for me to post the

$77,859,192.93 bond in cash.” She stated that she did not have

that amount available in cash at the time, and that, to post such

a bond, she would have had to sell many of her assets. As there

was not sufficient time to market them, she would have had to let

them go at “fire sale” prices, and, in any sale, she would also

incur “large taxes, fees and other costs of sale.” She concluded

that this would have been a “bad financial decision.” She selected

a letter of credit as collateral over real property or securities as

the costs for the former were less. Under all of the

circumstances, Sabella “determined that collateralizing the bond

with a letter of credit was the most cost efficient, time efficient

and prudent option.”

In reply, Rostack argued that Sabella impliedly admitted

that a cash collateralized bond was available to her, and as this

was a less expensive alternative, its availability established that

Sabella’s choice was neither reasonable nor necessary.6

Curiously, Rostack then conceded that Sabella’s choice may have

been financially reasonable for her, stating, “Sabella may have

had numerous pecuniary incentives to pursue the bond structure



6 Rostack also argued that Sabella should have backed up

the statements in her declaration with financial evidence, and

objected to the declaration as lacking in foundation for this

reason. The trial court ultimately overruled these objections. On

appeal, Rostack notes the court’s ruling, but does not argue that

it was error.

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that she did, primarily to avoid lost opportunity costs by

encumbering her cash or other assets.” Rostack argued, however,

that those incentives were simply irrelevant.

At the hearing on the motion to tax costs, the trial court

found the bond secured by a letter of credit to have been an

arm’s-length commercial transaction, reasonably entered into by

Sabella, and therefore denied the motion to tax. The court’s

ruling reflects that Sabella “examined alternative means to stay

enforcement and concluded that a surety bond with a letter of

credit was the best vehicle for her. [Her] decision and the costs

she incurred were reasonable, and [Rostack] has no legal right to

demand a less expensive alternative.”

4. Order to Pay Costs as Judgment

California Rules of Court, rule 8.278 governs awards of

costs on appeal. It provides that the clerk of the Court of Appeal

“must enter on the record, and insert in the remittitur, a

judgment awarding costs” to the prevailing party. (Cal. Rules of

Court, rule 8.278(b)(1).) After discussing the procedure for

determining the amount of costs in the trial court, the rule then

provides, “An award of costs is enforceable as a money judgment.”

(Cal. Rules of Court, rule 8.278(c)(3).)

At the end of the hearing on Sabella’s motion to tax costs,

Sabella’s counsel requested that the court order payment be

made within 30 days. There was some discussion as to whether

the court’s cost award would be part of a single final judgment to

be entered after trial or a separate judgment immediately

appealable. After the hearing, Sabella submitted a proposed

judgment; her notice cited to authority that an award of appellate

costs constitutes a separate judgment, immediately appealable.

Rostack objected to the proposed judgment, arguing that it was

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premature under the one final judgment rule. The trial court

entered the judgment as proposed by Sabella. Rostack filed a

timely notice of appeal.

DISCUSSION

On appeal, Rostack makes two arguments. First, it argues

that the court’s judgment awarding costs was an improper

interlocutory judgment, which is not final or enforceable in any

way, although it is appealable as a void judgment. Second,

Rostack argues that the bond and letter of credit premiums were

not reasonable or necessary as a matter of law, because less

expensive alternatives were available. We disagree with both

arguments.

1. The Judgment for Costs is a Final Enforceable Judgment

As noted above, California Rules of Court, rule 8.278(c)(3)

provides that an award of costs on appeal “is enforceable as a

money judgment.” Rostack concedes this is so, but argues that

the rule does not say “when an enforceable judgment for a

specific amount of appellate costs should be entered.” (Emphasis

Rostack’s.) Rostack takes the position that the one final

judgment rule, as set forth in cases such as Kurwa v. Kislinger

(2013) 57 Cal.4th 1097, requires that there be only a single

judgment in any case, and that it is premature to enter an

enforceable judgment for appellate costs when the trial is yet to

be had.

Rostack’s argument is meritless. Indeed, it was rejected as

early as 1931, when our Supreme Court resolved First Nat’l Bank

v. Stansbury (1931) 214 Cal. 190. In that case, the judgment had

been reversed on appeal, so the appellant was awarded its

appellate costs in a judgment. After retrial, the respondent was

successful, and obtained a judgment in its favor for a much

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smaller amount of costs. The appellant again appealed the

judgment in favor of the respondent and, while the appeal was

pending, sought to execute on the prior judgment in its favor for

appellate costs (while allowing an offset for the small award in

favor of respondent). (Id. at p. 191.) The issue presented was

whether the previously-successful appellant should be enjoined

from collecting its costs award until its current appeal of the

second judgment was resolved. The Supreme Court concluded

that it should not, stating, “The judgment for costs of appeal in

the first case has long since become final and the judgment for

costs in the second trial has not yet become final. [¶] We

perceive no grounds upon which to deny appellants the right to

realize upon their judgment. Oftentimes the trial court refuses to

proceed with a second trial until the costs of the appeal from a

former judgment have been paid. [Citation.] There is no

interdependence between the judgment for costs of the former

appeal and any judgment which may subsequently be entered in

the main case.” (Id. at p. 192.)

More recent authority is in accord. “ ‘[T]rial court costs are

a mere incident of the main judgment, and not separately

enforceable [citation], but after appeal, there may be a new trial

with even a further appeal, and the proceedings may cover a long

period of time. Accordingly, the award of costs on appeal, when

properly allowed in the trial court, represents an independent

judgment, enforceable by any available means. “It is a complete

judgment in itself that finds its origin in the order of an appellate

[court] or the Supreme Court affirming or reversing a judgment

of a lower court. The right to such judgment comes into being

when the order of the reviewing court becomes final. The

judgment itself is created when the successful party files his cost

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bill and his costs are taxed.” ’ [Citation.]” (Los Angeles Unified

School Dist. v. Wilshire Center Marketplace (2001) 89 Cal.App.4th

1413, 1419.) “If an appeal is taken from the judgment, the party

prevailing in the Court of Appeal is usually entitled to costs on

appeal. (Cal. Rules of Court, rule 8.278.) The award of costs is

included in the remittitur, although the amount of the award is

determined in the trial court. (Cal. Rules of Court,

rule 8.278(b)(1), (c).) These costs, however, are not added to the

trial court judgment, but constitute a separate judgment.

[Citations.]” (Lucky United Properties Investment, Inc. v. Lee

(2010) 185 Cal.App.4th 125, 138 (Lucky).)

Rostack overlooks this authority, relying instead on a

second appeal in the Lucky litigation, Lucky United Properties

Investment, Inc. v. Lee (2013) 213 Cal.App.4th 635 (Lucky II).

Rostack suggests that Lucky II stands for the proposition that the

award of appellate costs does not constitute a separate judgment

but is instead incorporated into the trial court judgment. But the

Lucky II court was distinguishing a trial court’s award of

appellate costs (such as costs and fees awarded pursuant to Code

of Civil Procedure section 425.16, the anti-SLAPP statute) from

appellate costs awarded by the Court of Appeal, although the

amount is determined in the trial court. Lucky II reiterated that

when the costs are awarded by the Court of Appeal, they

constitute a separate judgment, but held that when the costs and

fees are awarded by the trial court, they are incorporated into the

trial court judgment. (Lucky II, supra, at p. 654.) The Lucky II

court further explained why the two are treated differently. “The

rule that appellate court cost awards constitute separate

judgments is grounded both in statutory language and in

rationales that do not apply to appellate cost and fee awards

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under [the anti-SLAPP statute].” (Id. at p. 655.) These reasons

include that when we are concerned with an appellate court cost

award, it is the appellate court, not the trial court, that is the

source of the award – something which is “conceptually separate”

from the trial court judgment. (Ibid.) Additionally, “one

apparent purpose of the separate judgment rule for appellate cost

awards is to allow a litigant to collect the costs without having to

wait until the termination of potentially lengthy proceedings on

remand, which could not affect its entitlement to the appellate

costs.” (Ibid.)

This is not the only authority on the subject of the finality

of an appellate court’s cost award. The issue has also arisen in

the context of appealability – specifically, whether an order

taxing appellate costs (or an order denying a motion to tax those

costs) is immediately appealable. In 1994, Division Five of the

Second District held that it was not, reasoning that an appellate

cost award is not a post-judgment order because, when the case

has been remanded for further proceedings, there is no judgment

for it to be post. (Barnes v. Litton Systems, Inc. (1994)

28 Cal.App.4th 681, 683.) However, in 2011, Division Two of the

Fourth District rejected the Barnes court’s analysis, holding that

Division Five had overlooked the fact that an appellate cost order

is post- the judgment of the Court of Appeal. (Krikorian Premiere

Theatres, LLC v. Westminster Central, LLC (2011)

193 Cal.App.4th 1075, 1083.) The Krikorian court reviewed the

history of the issue, and concluded that Barnes was an outlier, in

that California courts had held such orders were appealable as

postjudgment orders to Court of Appeal judgments consistently

since 1925. (Id. at pp. 1079-1081.) In the course of its analysis,

Krikorian noted, as did all of the cases we have discussed above,

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that the “award of costs is immediately enforceable.” (Id. at

p. 1083.) “It cannot be affected by any further proceedings in the

trial court.” (Ibid.)

Rostack does not address much of this legal authority

directly. Instead, it makes a factual argument that the appellate

cost award in this particular case is not actually final because

Rostack is suing on a note which contained a clause which would,

Rostack alleges, entitle it to recover all of its “legal expenses”

from Sabella if it is ultimately successful – and those legal

expenses would include the appellate costs previously awarded

Sabella. It is, of course, premature for us to consider whether

such a clause would extend to appellate costs ordered by this

court in connection with the prior appeal. There has been no

trial, no prevailing party on the contract, and no attempt to

recover any such costs under the clause. This much, however, is

clear: the fact that Rostack may, in the future, possibly pursue

an argument that it has a right to reimbursement for the cost

award does not undermine the overwhelming legal authority that

the cost award is final.

2. The Bond and Letter of Credit Premiums were Reasonable

and Necessary

The trial court’s exercise of discretion in granting or

denying a motion to tax costs will not be disturbed if substantial

evidence supports its decision. (Jewell v. Bank of America (1990)

220 Cal.App.3d 934, 941.) The applicable rule of court itemizes

the appellate costs which may be recovered “if reasonable.” (Cal.

Rules of Court, rule 8.278(d)(1).) Those items include, “The cost

to procure a surety bond, including the premium, the cost to

obtain a letter of credit as collateral, and the fees and net interest

expenses incurred to borrow funds to provide security for the

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bond or to obtain a letter of credit, unless the trial court

determines the bond was unnecessary.” (Cal. Rules of Court,

rule 8.278(d)(1)(F).) As bond premiums and interest expenses

incurred to obtain a letter of credit are specifically itemized by

the rule, the issue raised by this appeal is whether substantial

evidence supports the trial court’s conclusion that those items, as

incurred by Sabella in this case, were reasonable and necessary.

Rostack argues that they were not, because Sabella could have

obtained a cash-collateralized bond instead.

However, the mere fact that an alternative procedure,

which would have been less expensive, was available does not

mandate that the option chosen was unreasonable or

unnecessary. (See Jewell v. Bank of America, supra,

220 Cal.App.3d at pp. 940-941 [the alternative was uncertain];

Acoustics, Inc. v. Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 916

[the alternative may have caused too much delay given the

party’s financial obligations].) In considering whether premiums

were necessary, some factors a court may consider in addition to

the availability of alternatives include: the expediency to the

judgment debtor of the alternative procedure, the delay the

alternative procedure entailed, the risk of using the alternative

procedure, and “other additional expense and interference” with

business operations which might be incurred by utilization of the

alternative procedure. (Jewell, supra, 220 Cal.App.3d at p. 941.)

Sabella’s declaration explained that she had considered the

alternative procedure of a cash-collateralized bond, but had

rejected it as not feasible or economically sound for her. She did

not have the cash on hand, and would have had to liquidate

substantial assets, incurring transaction costs, taxes, and market

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losses.7 Although Rostack sought to challenge this evidence with

other evidence suggesting Sabella did, in fact, have sufficient

cash easily available, Sabella’s declaration constitutes

substantial evidence that she did not – and the trial court was

free to accept this evidence and reject Rostack’s.

There is one final point lurking in the background of this

case: lost opportunity costs.8 Rostack’s argument that Sabella

could have posted a cash-collateralized bond, and thereby earn a

net of 0.25 percent on her deposit, assumes not only that Sabella

had $77 million in ready cash, but also assumes that the same

$77 million could not have been put to better work for Sabella

and earn her a great deal more than the 0.25 percent she would

have received if it was tied up in the bond. Indeed, unspoken in

Sabella’s declaration was the premise that, given the choice

between a net gain of 0.25 percent on a deposit of $77 million,



7 Rostack focusses on Sabella’s statement, “At the time I

obtained the bond, I did not have $77,859,192.93 available in

cash.” Rostack argues that this statement is a “negative

pregnant,” which is pregnant with the implication that she had

the cash ready at a nearby date, or had the amount less one cent

available on the date she obtained the bond. We need not

address this argument because it takes Sabella’s statement out of

context. Sabella’s declaration explained that to be able to post

the cash, she would have had to sell “many” of her assets at “fire

sale” prices – statements which flatly contradict the implied

statements Rostack would infer from the so-called “negative

pregnant” standing alone.

8 Sabella raises the issue in her respondent’s brief on appeal,

but did not specifically address it before the trial court. We do

not address the evidence she raises on the point for the first time

on appeal. As we have noted, Rostack discussed the issue in its

reply in support of its motion to tax costs.

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and a net loss of 0.9 percent in bond/letter of credit premiums,

the loss of 0.9 percent was the preferable choice – given what she

could otherwise do with her $77 million. Rostack itself

recognized the point, stating, “Sabella may have had numerous

pecuniary incentives to pursue the bond structure that she did,

primarily to avoid lost opportunity costs by encumbering her cash

or other assets.” Rostack stated, however, that “the law is clear

that such lost opportunity costs should not be taken into

consideration when awarding costs on appeal.” On the contrary,

the law is only that lost opportunity costs should not be awarded.

(See Siry Investments, L.P. v. Farkhondehpour (2015)

238 Cal.App.4th 725, 733 [acknowledging the argument that an

appellant might seek lost opportunity costs was “a valid concern,”

but holding it did not apply in that case]; Sequoia Vacuum

Systems v. Stransky (1964) 229 Cal.App.2d 281, 289 [not allowing

recovery of interest associated with borrowing money to deposit a

cash bond for fear that to do so would open the door to recovery of

lost opportunity costs].) The parties have not cited, and

independent research has not disclosed, any authority specifically

addressing whether lost opportunity costs are a factor which can

be taken into consideration when determining whether costs

incurred were reasonable and necessary. We believe that lost

opportunity costs are an appropriate factor in determining the

method used to bond the judgment. If lost opportunity costs are

not considered at all, an appellant must choose the bonding

alternative which will result in the lowest cost being passed on to

the respondent (should the appellant be successful on appeal)

even if that alternative results in a greater net financial loss to

the appellant if the appeal is unsuccessful and the appellant

must bear the costs itself. If “reasonable” is to mean anything, it

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must mean reasonable to the appellant under all of the

circumstances. It is reasonable for the appellant to choose the

method that is cost-effective based on its own financial situation;

not to be forced to choose what might be best for the respondent.

(See Jewell, supra, 220 Cal.App.3d at p. 941 [identifying factors

in the reasonableness analysis from the debtor’s point of view].)

The trial court’s determination that the bond and letter of

credit costs were reasonable and necessary is supported by

substantial evidence, and therefore must be affirmed.

The judgment awarding costs is affirmed. Rostack is to pay Sabella’s costs on appeal.