Sharif v. Mehusa, Inc.

*188 Opinion

INTRODUCTION

Plaintiff and appellant Mahta Sharif brought an action against her former employer, defendant and respondent Mehusa, Inc., for unpaid overtime (Lab. Code, § 1194), 1 unpaid wages (§ 201), and violation of California’s Equal Pay Act (§ 1197.5). She prevailed on her Equal Pay Act claim with the jury awarding her $26,300. Defendant prevailed on plaintiff’s overtime and wage claims. Plaintiff filed a cost memorandum and was awarded her costs. She also filed a motion for attorney fees under section 1197.5, subdivision (g) as the prevailing party on her Equal Pay Act claim. Defendant filed a motion for attorney fees and costs under section 218.5 as the prevailing party on plaintiff’s wage claim. The trial court awarded plaintiff her attorney fees and defendant its attorney fees and costs. The trial court offset the attorney fees awards for a net award to plaintiff of $3,709.19.

On appeal, plaintiff contends that she was the sole prevailing party on a “ ‘practical level’ ” and as that term is defined in Code of Civil Procedure section 1032, subdivision (a)(4). Accordingly, plaintiff contends, the trial court erred in awarding defendant its attorney fees and costs. Plaintiff also contends that the trial court abused its discretion in calculating her attorney fees. In affirming, we hold in the published portion of this opinion that when there are two fee-shifting statutes in separate causes of action, there can be a prevailing party for one cause of action and a different prevailing party for the other cause of action.

BACKGROUND 2

Plaintiff filed a complaint against defendant alleging causes of action for unpaid overtime, unpaid wages, and violation of California’s Equal Pay Act. After a trial, the jury returned a verdict in favor of plaintiff on her Equal Pay Act claim and awarded her $26,300. 3 The jury also returned verdicts in favor of defendant on plaintiff’s overtime and wage claims.

*189 After a judgment was entered in her favor, plaintiff submitted a memorandum of costs seeking $3,731.23 and moved for an award of $280,432 in attorney fees pursuant to section 1197.5, subdivision (g). Plaintiff’s attorney fees request consisted of a lodestar amount 4 of $140,216 and a multiplier of two. Defendant did not challenge plaintiff’s cost memorandum, and the clerk entered plaintiff’s costs as requested. Defendant opposed plaintiff’s attorney fees motion.

Pursuant to section 218.5, a statute covering attorney fees for wage claims, defendant filed a motion for attorney fees and costs in the total amount of $36,982.24, contending that it was entitled to its fees and costs as the prevailing party on plaintiff’s wage claim. That amount represented 75 percent of the attorney fees and costs defendant spent in defending against plaintiff’s entire action. Defendant estimated that 75 percent of defense counsel’s time was spent defending against plaintiff’s unsuccessful wage claim. Plaintiff filed a motion to strike or tax defendant’s memorandum of costs on the grounds that plaintiff, having received a net monetary recovery against defendant, was the prevailing party within the meaning of Code of Civil Procedure section 1032, subdivision (a)(4), and defendant was not a prevailing party because it did not meet any of that section’s prevailing party definitions. Plaintiff opposed defendant’s attorney fees motion, arguing that in any action there can be only one prevailing party. She claimed that she was the prevailing party because she prevailed on a “ ‘practical level’ ” — i.e., she prevailed on her Equal Pay Act claim and was awarded $26,300.

The trial court ruled that a plaintiff who prevails on an Equal Pay Act claim is entitled to its attorney fees under section 1197.5, subdivision (g). Accordingly, it ruled that plaintiff was entitled to reasonable attorney fees for prevailing on her Equal Pay Act claim.

The trial court ruled that section 218.5 is a two-way fee-shifting statute that requires the award of reasonable attorney fees and costs to the prevailing party on wage claims. Relying on Aleman v. Airtouch Cellular (2012) 209 Cal.App.4th 556, 582-583 [146 Cal.Rptr.3d 849] (Aleman), it further ruled that when there are multiple claims asserted in an action, to be a “prevailing party” under section 218.5, a defendant need not prevail on all of the claims, but only on those claims to which section 218.5 applies. It ruled that because the jury found for defendant on plaintiff’s wage claim, defendant was the prevailing party as to that claim for purposes of a fee award under section 218.5.

The trial court found reasonable defendant’s claim that it incurred total attorney fees of $39,993.08 in its defense of plaintiff’s entire action and that *190 defense counsel spent 75 percent of his time on the successful defense of plaintiffs wage claim. Accordingly, it granted defendant’s request to be awarded 75 percent of its attorney fees or $31,344.81.* 5

The trial court stated that plaintiff claimed to have incurred attorney fees of $140,216 for the prosecution of her Equal Pay Act claim and for the preparation of the attorney fees motion. Plaintiff’s counsel stated that he excluded fees for services rendered exclusively on the overtime and wage claims, but that the remaining fees included time spent on claims that were so intertwined with plaintiff’s Equal Pay Act claim that it was impractical to apportion that time. The trial court noted defendant’s argument that plaintiff’s action focused on her wage claim and not on her Equal Pay Act claim, and found that defendant presented evidence that plaintiff’s fee request included “time spent unrelated to the litigation of [plaintiff’s Equal Pay Act cause of action].”

The trial court ruled, “Reviewing Plaintiff’s attorney fees request and considering Plaintiff’s limited success at trial, it appears that Plaintiff is unreasonably claiming almost all of the fees incurred in this action as being intertwined with the [Equal Pay Act cause of action]. Therefore, the Court will apply a three-fourths negative multiplier with no other adjustment. This results in attorney fees in favor of Plaintiff of $35,054.” The trial court offset the $35,054 in attorney fees it awarded plaintiff with the $31,344.81 in attorney fees it awarded defendant, for a net attorney fees award of $3,709.19 to plaintiff.

The trial court also ruled that defendant was entitled to recover its costs for the same reason defendant was entitled to recover its attorney fees — i.e., under section 218.5 as the prevailing party on plaintiff’s wage claim. Accordingly, the trial court denied plaintiff’s motion to strike defendant’s memorandum of costs. The trial court did, however, grant plaintiff’s motion to tax certain of defendant’s claimed costs, awarding defendant adjusted costs of $4,301.68.

DISCUSSION

I. Defendant’s Attorney Fees and Costs Under Section 218.5

Plaintiff contends that she and not defendant was the sole prevailing party in this case on a “ ‘practical level’ ” and under Code of Civil Procedure section 1032, subdivision (a)(4) 6 because she received a net monetary recovery by *191 virtue of the jury’s $26,300 award on her Equal Pay Act claim. Accordingly, plaintiff argues, the trial court erred in ruling that defendant was a prevailing party on plaintiff’s wage claim and awarding defendant attorney fees and costs under section 218.5. 7

A. Attorney Fees

“Generally, a trial court’s determination that a litigant is a prevailing party, along with its award of fees and costs, is reviewed for abuse of discretion. (See Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 94 [14 Cal.Rptr.3d 67, 90 P.3d 1223]; PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 [95 Cal.Rptr.2d 198, 997 P.2d 511].)” (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332 [104 Cal.Rptr.3d 219, 223 P.3d 77].) When, however, the determination that a litigant is a prevailing party involves the interpretation of a statute, the issue concerns a matter of law that is reviewed de novo. (Ibid.)

“In general, a prevailing party may recover attorney’s fees only when a statute or an agreement of the parties provides for fee shifting. [Citation.] Labor Code section 218.5 requires the awarding of attorney’s fees to the prevailing party ‘[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.’ This provision awards fees to the prevailing party whether it is the employee or the employer; it is a two-way fee-shifting p rov ision.”

*192 The courts have repeatedly rejected the contention that the prevailing party definitions in Code of Civil Procedure section 1032, subdivision (a)(4) “should be automatically applied in cases where the authorizing attorney fees statute does not define prevailing party. [Citations.] [¶] In the absence of legislative direction in the attorney fees statute, the courts have concluded that a rigid definition of prevailing party should not be used. [Citation.] Rather, prevailing party status should be determined by the trial court based on an evaluation of whether a party prevailed ‘ “on a practical level,” ’ and the trial court’s decision should be affirmed on appeal absent an abuse of discretion.” (Donner Management Co. v. Schaffer (2006) 142 Cal.App.4th 1296, 1310 [48 Cal.Rptr.3d 534] (Donner).) “Among the factors the trial court must consider in determining whether a party prevailed is the extent to which each party has realized its litigation objectives. [Citations.]” (Zuehlsdorf v. Simi Valley Unified School Dist. (2007) 148 Cal.App.4th 249, 257 [55 Cal.Rptr.3d 467] (Zuehlsdorf).)

Plaintiff argues that she was a prevailing party for purposes of a fee award and entitled to a mandatory fee award by virtue of her $26,300 award on her Equal Pay Act claim. Her success on only one cause of action and not others, she argues, required only an apportionment or reduction of fees and not an award of fees to defendant on plaintiff’s “nonsuccessful causes of action.” She further argues that defendant was not entitled to its attorney fees because it was not the prevailing party under Code of Civil Procedure section 1032. By virtue of her $26,300 award, plaintiff reasons, she was the “prevailing party for purposes of any and all attorney fee awards.”

Plaintiff is correct that she was entitled to an attorney fees award as the prevailing party on her Equal Pay Act claim. Thus, the trial court correctly awarded her attorney fees under section 1197.5, subdivision (g) for her success on that claim. The trial court did not award defendant fees at all on plaintiff’s overtime claim, and it awarded defendant attorney fees on plaintiff’s wage claim because defendant was the prevailing party under section 218.5, the attorney fees statute for wage claims.

The trial court did not err in determining that defendant was the prevailing party on plaintiff’s wage claim. In her complaint, plaintiff claimed that defendant failed to pay her $261,998.27 in wages. The jury found that defendant owed her nothing for wages. Thus, defendant was the “prevailing party” on plaintiff’s wage claim — that is, it prevailed on a “ ‘practical level’ ” (Donner, supra, 142 Cal.App.4th at p. 1310) and “realized its litigation objectives” (Zuehlsdorf, supra, 148 Cal.App.4th at p. 257). Accordingly, defendant was entitled to its attorney fees under section 218.5.

Plaintiff also contends that the trial court erred in interpreting Aleman, supra, 209 Cal.App.4th 556 to stand for the proposition that under section *193 218.5 prevailing party status is determined on a claim-by-claim basis. In Aleman, the defendant prevailed on a summary judgment motion on claims for reporting time and split shift pay. (Aleman, supra, 209 Cal.App.4th at pp. 564-565.) The trial court awarded the defendant its attorney fees for both claims under section 218.5. (Aleman, supra, 209 Cal.App.4th at p. 583.) The Court of Appeal held that the split shift claim was subject to the attorney fees provision in section 1194 — a plaintiff’s only fee-shifting statute — and the reporting time claim was subject to the attorney fees provision in section 218.5 — a prevailing party fee-shifting statute. (Aleman, supra, 209 Cal.App.4th at pp. 562-563, 579.)

The Court of Appeal then addressed the effect of section 218.5’s provision that “ ‘[t]his section does not apply to any action for which attorney’s fees are recoverable under Section 1194’ ” 8 on its holding that one of the plaintiff’s claims was subject to section 1194 and the other was subject to section 218.5. (Aleman, supra, 209 Cal.App.4th at pp. 583-584.) It had to -determine “whether, in the context of section 218.5, ‘any action’ means any civil action in which attorney fees are recoverable under section 1194, or whether ‘any action’ simply means any cause of action.'''’ (Aleman, supra, 209 Cal.App.4th at pp. 583-584.) It concluded that “ ‘any action’ in section 218.5 refers to any ‘cause of action’ ” and attorney fees thus could be awarded on the reporting time claim notwithstanding that the case also included a claim subject to section 1194. (Aleman, supra, 209 Cal.App.4th at p. 584.)

The Court of Appeal explained that “[a] contrary conclusion — that ‘any action’ means ‘any civil action’ — would be much more likely to result in mischief or absurdity. To take an example, Employee A, who first files one civil action for unpaid overtime compensation and then a separate civil action for unpaid regular wages, would face a potential adverse attorney fees award in the second lawsuit. Meanwhile, Employee B, who files a single civil action asserting claims for both unpaid overtime compensation and unpaid regular wages, would not be subject to any adverse fees award, even if he or she loses on both claims. Conversely, if ‘any action’ means ‘any cause of action,’ both Employee A and Employee B are potentially subject to adverse fees awards — clearly a more practical and equitable result.” (Aleman, supra, 209 Cal.App.4th at p. 584.) Therefore, the Court of Appeal held, the trial court had to determine the reasonable amount of attorney fees awardable to the *194 defendant for its defense of the claim for reporting time, apportioning fees incurred for separate causes of action as appropriate. (Ibid.)

Because the defendant in Aleman, supra, 209 Cal.App.4th 556 prevailed on both claims asserted, plaintiff contends that the case, correctly interpreted, merely stands for the unremarkable proposition that a trial court is to apportion an attorney fees award between causes of action that provide for fees and those that do not. Although Aleman is distinguishable because it did not concern competing attorney fees awards to different parties under separate attorney fees statutes, it does stand for the proposition that a party is a prevailing party under section 218.5 when the party prevails on a claim for unpaid wages, even when such a claim is made with other claims on which attorney fees are not recoverable. Aleman provides a useful framework for analyzing the issue in this case. That is, if plaintiff had brought her wage and Equal Pay Act claims in separate actions, defendant would have been entitled to recover its attorney fees in the action asserting the wage claim and plaintiff would have been entitled to recover her attorney fees in the action asserting the Equal Pay Act claim. There is no legal or logical reason why defendant should be precluded from recovering its attorney fees on plaintiff’s wage claim simply because plaintiff combined her wage and Equal Pay Act claims in a single action. By providing that the prevailing party under one statute is entitled to fees, and that a different prevailing party under another statute is entitled to fees, the Legislature expressed an intent that there can be two different prevailing parties under separate statutes in the same action. Thus, a net monetary award to a party does not determine the prevailing party when there are two fee-shifting statutes involved in one action.

B. Costs

Plaintiff asserts that section 218.5 does not “define or dictate” how a trial court is to determine which party is the prevailing party for purposes of awarding costs. The prevailing party determination, plaintiff argues is “governed exclusively by Code of Civil Procedure section 1032, subdivision (a)(4).”

For cost awards under Code of Civil Procedure section 1032, subdivision (a)(4), there is a single prevailing party. (Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198-1199 [57 Cal.Rptr.2d 227].) Plaintiff quotes our opinion in Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 189 [82 Cal.Rptr.3d 586], for the proposition that, with respect to Code of Civil Procedure section 1032, “[i]f the Legislature had intended more than one party to qualify as a prevailing party under the mandatory cost award provision, it easily could have provided for the trial court to exercise discretion to award costs in the event that more than one party qualified as a *195 prevailing party.” Plaintiff contends that the trial court, in contravention of Code of Civil Procedure section 1032, ignored her “net monetary recovery and rather focused on her failure to win on all causes of action in order to deny she was the sole party entitled to costs.” The trial court did not, however, award defendant costs as a prevailing party under Code of Civil Procedure section 1032, subdivision (a)(4). Instead, it determined that defendant was the prevailing party on plaintiff’s wage claim and was entitled to its costs under Labor Code section 218.5, which expressly provides for a cost award to the prevailing party. Just as Code of Civil Procedure section 1032, subdivision (a)(4) does not necessarily determine the prevailing party for purposes of an attorney fees award under section 218.5, it also does not necessarily determine the prevailing party for purposes of a costs award under section 218.5. The logic applied to the attorney fees award above also applies to costs.

II. Plaintiff’s Attorney Fee Award *

DISPOSITION

The attorney fees and cost orders are affirmed. Defendant is awarded its costs on appeal.