Treaster v. Healthsouth Corp. (505 F. Supp. 2d 898, 2007)

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

This is a medical negligence case arising from a fall plaintiff Larry Treaster suffered while he was a patient at defendant HealthSouth Corporation d/b/a Mid-America Rehabilitation Hospital (“the hospital”). Defendant Daniel R. Wilson, M.D., was plaintiffs treating physician as well as the hospital’s medical director at the time of the fall. Plaintiff settled his claim against the hospital shortly before trial, then proceeded to trial on his claim against Dr. Wilson. The jury returned a verdict in favor of Dr. Wilson and the court entered judgment accordingly. This matter comes before the court on Plaintiffs Motion for Review of Taxation of Costs by Clerk (doc. # 189). In this motion, plaintiff asserts objections to specific costs taxed by the clerk and, additionally, asks the court to deny costs entirely due to plaintiffs indi-gency and the close and difficult nature of the case. For the reasons explained below, the court will grant plaintiffs motion in part and reduce defendant Wilson’s costs to $3,776.61.

BACKGROUND

Plaintiff originally brought this lawsuit against the hospital, Dr. Wilson, his employer Rehabilitation Medicine, P.A., K. Dean Reeves, M.D., and Mohinder S. Pe-gany, M.D. Plaintiff subsequently dismissed his claims against Dr. Pegany, Dr. Reeves, and Rehabilitation Medicine. At the time the pretrial order was entered the only two remaining defendants were the hospital and Dr. Wilson. The case was set for jury trial beginning Tuesday, September 26, 2006. On the Friday prior, September 22, 2006, plaintiff and the hospital reached an agreement settling plaintiffs claim against the hospital. Thus, the posture of the case as it stood at the time of trial was that plaintiff claimed that defendant Wilson was negligent in failing to order adequate restraints to ensure that plaintiff was properly restrained to protect him from falling; defendant Wilson, in turn, denied that he was at fault and further asserted the hospital’s comparative fault.

The case was tried to a jury beginning September 26, 2006. On October 5, 2006, the jury returned a verdict in defendant Wilson’s favor, finding he was not at fault. The court entered judgment accordingly, stating that defendant Wilson should recover of plaintiff his costs of the action. After trial, defendant Wilson filed his bill of costs, seeking $8,906.19 as his costs of the action. On January 11, 2007, the clerk taxed costs against plaintiff in the amount of $7,538.47. Plaintiff then filed the current motion to retax costs, seeking this court’s review of the taxation of costs assessed by the clerk. In plaintiffs motion, plaintiff objects to certain specific items that the clerk taxed as costs. Additionally, plaintiff asks the court to deny costs entirely due to plaintiffs indigency and the close and difficult nature of the case.

On February 28, 2007, the court issued a Memorandum and Order directing the parties to submit supplemental briefs addressing the issue of plaintiffs indigency. Defendant Wilson then filed a motion seeking an order requiring plaintiff to disclose information relating to the financial aspects of plaintiffs eve-of-trial settlement with the hospital. The court granted the motion and directed plaintiff to produce that information in camera for the court’s review. The court has now reviewed plaintiffs supplemental brief and the settlement information plaintiff submitted to the court for in camera inspection. The deadline for defendant Wilson to file a supplemental response brief has passed. The court has carefully reviewed the record and is now prepared to rule.

DISCUSSION

Federal Rule of Civil Procedure 54(d) provides that “[ejxcept when express provision therefor is made in a statute of the United States or in these rules, costs other than attorneys’ fees shall be allowed as of course to the prevailing party unless the court otherwise directs.” This rule creates a presumption that the district court will award the prevailing party costs. Rodriguez v. Whiting Farms, Inc., 360 F.3d 1180, 1190 (10th Cir.2004). The denial of costs is in the nature of a severe penalty and there must be some apparent reason to penalize the prevailing party if costs are to be denied. Id. The allowance or disallowance of costs to a prevailing party is within the sound discretion of this court, but this discretion is limited in two ways: first, as stated previously, Rule 54 creates a presumption that the district court will award costs to the prevailing party and, second, the court must provide a valid reason for not awarding costs to a prevailing party. Cantrell v. Int’l Bhd. of Elec. Workers, 69 F.3d 456, 458-59 (10th Cir.1995) (en banc). The non-prevailing party has the burden to overcome the presumption in favor of awarding costs. Rodriguez, 360 F.3d at 1190.

Plaintiff contends that the court should deny costs entirely because of plaintiffs indigency and the close and difficult nature of the case. The Tenth Circuit has indeed suggested that these may serve as valid reasons for denying costs. Cantrell, 69 F.3d at 459 (noting that the Seventh Circuit has held that it is not an abuse of discretion for the district court to deny costs where the non-prevailing party is indigent and that the Sixth Circuit has held that a district court may deny a motion for costs if the issues are close and difficult); see also Rodriguez, 360 F.3d at 1190 (citing Cantrell for the proposition that other circuits have recognized that the indigent status of the non-prevailing party and the presentation of issues that are close and difficult are both circumstances in which a district court may deny costs).

Turning first to plaintiffs claim of indi-gency, this court follows the Tenth Circuit’s lead that the indigency exception derives from case law from the Seventh Circuit, and the court looks to the law of the Seventh Circuit in evaluating plaintiffs claim of indigency. The Seventh Circuit has held that in denying costs based on this basis, the court should first “make a threshold factual finding that the losing party is incapable of paying the court-imposed costs at this time or in the future.” Rivera v. City of Chicago, 469 F.3d 631, 635 (7th Cir.2006) (quotation omitted). The non-prevailing party has the burden of providing the court with sufficient documentation to support such a finding. Id. “This documentation should include evidence in the form of an affidavit or other documentary evidence of both income and assets, as well as a schedule of expenses.” Id. “Second, the district court should consider the amount of costs, the good faith of the losing party, and the closeness and difficulty of the issues raised” in deciding whether to deny costs. Id. Again, the non-prevailing party has the burden to establish that he or she is entitled to the benefit of the indigency exception. Id.

A. Plaintiff’s Ability to Pay Costs

In this case, plaintiff has provided sufficient documentation to satisfy the court that he is incapable of paying court-imposed costs at this time or in the future. His income consists of worker’s compensation and social security disability benefits in the amount of $1,780.92 per month. He has estimated his monthly expenses, which the court does not find to be unreasonable, to be $1,893. Thus, his monthly expenses exceed his monthly income. He has no savings or investments. He has a joint checking account with his wife and the average balance is normally around $500. It does not appear that plaintiffs dire financial circumstances are likely to improve in the future because he is permanently and totally disabled as a result of a work-related traumatic brain injury. In fact, it was during his hospitalized rehabilitation from that injury that he suffered the fall that was the subject of this lawsuit. Notwithstanding plaintiffs current financial circumstances, defendant contends that plaintiff should be able to pay his costs from the money he received from his settlement with the hospital. The court has reviewed the information submitted by plaintiff in camera concerning the distribution of these settlement proceeds. Without divulging confidential information concerning the amount of the settlement, suffice it to say that those settlement proceeds are gone. They were used primarily to pay plaintiffs attorneys’ fees and expenses. Plaintiff used the relatively modest amount that he received to pay down a balance on a credit card. During a telephone conference in this case, counsel for defendant Wilson suggested that those settlement funds should have been used to pay defendant Wilson’s costs before being used for other purposes. Defendant Wilson has not, however, cited to the court any authority which would support the proposition that defendant Wilson had priority to those funds. Those settlement proceeds are indeed gone, and plaintiff has submitted evidence which establishes that he is incapable of paying court-imposed costs at this time or in the future. This threshold showing is all that is required to potentially invoke the indigency exception. Because plaintiff has made this threshold showing, then, the court must next consider the amount of costs, the good faith of plaintiff, and the closeness and difficulty of the issues raised in deciding whether to deny costs.

B. Amount of Costs

The clerk taxed costs in the amount of $7,538.47. Plaintiff asks the court to reduce this amount to $3,038.48 by disallowing certain costs which, plaintiff contends, are not properly taxable. The costs allowed under Rule 54(d) is governed by 28 U.S.C. § 1920, which provides that the judge or the clerk may tax as costs certain enumerated categories of expenses. § 1920. The court has no discretion to award items as costs that are not set forth in § 1920. Bee v. Greaves, 910 F.2d 686, 690 (10th Cir.1990). The party seeking its costs has the burden of establishing the amount of compensable costs and expenses to which it is entitled. Allison v. Bank One-Denver, 289 F.3d 1223, 1248-49 (10th Cir.2002). Following are the disputed items of costs.

1. Service of Subpoena

The clerk taxed service of a subpoena on Lynda Watson, R.N. in the amount of $125.10. The cost of service of a subpoena is statutorily recoverable as “[f]ees of the ... marshal” under § 1920(1). See Burton v. R.J. Reynolds Tobacco Co., 395 F.Supp.2d 1065, 1078 (D.Kan.2005). Although defendant Wilson used a private process server instead of the marshal, service fees to private process servers are generally taxable up to the amount that would have been incurred if the U.S. Marshal’s office had effected service. See id. The cost for service by the marshal is $45 plus mileage at 44.5i per mile. The process server charged for 180 miles at 44.5