Judge Latrice A. G. Byrdsong, Case Number: 20STCV09007, Date: 2023-12-06 Tentative Ruling

Judge: Latrice A. G. Byrdsong, Case: 20STCV09007, Date: 2023-12-06 Tentative Ruling

*** Please Note that the Judicial Officer Presiding in Department 25 is Commissioner Latrice A. G. Byrdsong ***
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Plaintiff was employed by Defendants Carrie Forbes, Inc. and Carrie Forbes as a bookkeeper from October 21, 2019 until February 20, 2020. Plaintiff alleges during her employ Defendants committed multiple Labor Code violations, including depriving her of meal and rest breaks, failing to pay her overtime, failing to pay her proper wages and failure to provide itemized wage statements. Plaintiff alleges that when she was terminated, Defendant Forbes also assaulted and battered her.

Plaintiff filed this action on March 5, 2020. The action was assigned to Department 28, the Hon. Rupert A. Byrdsong. The operative complaint is the Second Amended Complaint filed on October 26, 2020, alleging (1) failure to pay wages; (2) failure to provide rest periods; (3) failure to pay minimum wage; (4) failure to pay overtime wages; (5) failure to pay wages due upon termination: waiting time penalties; (6) failure to issue accurate itemized wage statements; (7) unlawful/unfair business practice; (8) retaliation; (9) wrongful termination in violation of public policy; (10) assault and battery; (11) failure to reimburse/indemnify; and (12) intentional infliction of emotional distress.

On September 20, 2022, Defendants filed a motion for summary adjudication of the 8^th cause of action for retaliation under Labor Code §§98.6 and 1102.5, 9^th cause of action for wrongful termination and 10^th cause of action for assault and battery of the Second Amended Complaint.

On February 22, 2023, the Court granted Defendants’ Motion for Summary Adjudication, adjudicating the 8^th through 10^th causes of action of the Second Amended Complaint.

On July 12, 2023, Plaintiff filed a request for voluntary dismissal of the 12^th cause of action for intentional infliction of emotional distress.

On August 8, 2023, Plaintiff filed a motion to reclassify the action on grounds that the damages fell below the jurisdictional amount of Department 28, an unlimited department.

On August 18, 2023, the Court granted Plaintiff’s motion to reclassify. The action was reassigned from Department 28 to this Court.

On October 16, 2023 and October 27, 2023, the parties filed a joint stipulation foregoing the trial date while the parties attempted to informally resolve the issues remaining after Defendants’ successful motion for summary adjudication of the 8^th cause of action for retaliation under Labor Code §§98.6 and 1102.5, 9^th cause of action for wrongful termination and 10^th cause of action for assault and battery of the Second Amended Complaint and dismissal of the 12^th cause of action for IIED.

On November 6, 2023, Plaintiff filed the instant motion for attorney’s fees. On November 21, 2023, Defendants filed an opposition to the motion for attorney’s fees. On November 29, 2023, Plaintiff filed a late reply to Defendant’s opposition.

Plaintiff moves for an award of attorney’s fees in the amount of $316,638 based on 335.2 attorney hours. Plaintiff argues she undisputedly prevailed on the remaining Labor Code claims, as acknowledged by the parties in their stipulation filed on October 16 and October 27, 2023. Plaintiff argues parties stipulated that they would forego the trial date and move directly for attorney’s fees and costs. Plaintiff seeks the fees and costs pursuant to CCP §1033.5, Labor Code §§218, 1194.2 and 2802 and the parties’ stipulation. Plaintiff argues the requested fees are reasonable given the nature of the litigation and the degree to which it was hotly disputed. Plaintiff asks that the Court also apply a multiplier of 2.0, because Defendants made constant veiled threats of malicious prosecution and the legal issues were complex.

Defendants argue the wage and hour claims that are remaining were resolved four months from when the action was filed. Defendants argue they tendered payment to Plaintiff on July 20, 2020, to resolve all of Plaintiff’s claims for unpaid wages and waiting time penalties. Defendants argue they resolved the remaining claims two and a half years before the Court adjudicated Plaintiff’s 8^th through 10^th causes of action. Defendants argue the parties acknowledged in their stipulation that nothing was left to be litigated other than Plaintiff’s attorney’s fees. Defendants argue the purpose of the stipulation was for the parties to try and resolve the attorney’s fees issue informally.

Defendants argue Plaintiff served them with a request for attorney’s fees in an amount exceeding $200,000 on November 1, 2023. Defendants argue Plaintiff did not attempt to engage in meaningful settlement discussions and filed this motion for fees only five days later.

Defendants argue the amount of fees requested is unreasonable given that she did not prevail on any causes of action remaining after Defendants’ tendered payment for the wage and hour claims. Defendants argue Plaintiff’s requests fees for litigation of the entire action. Defendants argue Plaintiff is only entitled to recover fees in connection with the wage and hour claims, which were resolved within four months of this action being filed.

Defendants argue the hourly rate of Plaintiff’s counsel is unreasonable. Defendants ask that the Court reduce the rates if it is inclined to grant the motion.

Defendants argue the wage and hour claims were not complex and the law is settled on them. Defendants argue the work performed by counsel was not extraordinary.

Defendants argue the fees claimed are incongruent with the amount of time and effort expended on the wage and hour claims, which were fully resolved when Defendants tendered $6,748.47 to Plaintiff four months after the action was filed.

Defendants argue the number of hours claimed by Plaintiff is unreasonable. Defendants argue the hours claimed were not reasonably spent on wage and hour claims that were resolved four months into the action.

Defendants argue Plaintiff should have apportioned the attorney’s fees between the wage and hour claims and the remaining claims. Defendants argue Plaintiff fails to demonstrate that she prevailed on the non-wage and hour claims or that the wage and hour claims were so intertwined with the non-wage and hour claims that apportionment is impossible. For this reason, Defendants ask that the Court apply a negative multiplier and reduce the fees.

Plaintiff disagrees that her wage and hour claims are resolved. Plaintiff argues Defendant has served her with a notice of deposition relating to these allegedly resolved claims. Plaintiff argues Defendant is continuing to litigate claims it is claiming were resolved. Plaintiff argues the parties have stipulated to bring this motion for fees and any assertion otherwise is contradicted by the stipulation. Plaintiff argues the requested fees are reasonable, because the wage and hour issues are not rudimentary but are novel and complex. Plaintiff argues Plaintiff’s counsel litigated this action with more skill than that of reasonably diligent counsel. Plaintiff argues the fees are reasonable as Defendants concede there are issues remaining to be litigated. Plaintiff argues apportionment is not appropriate, because there are remaining issues. Plaintiff argues the Court should apply a positive multiplier in light of the circumstances. Plaintiff argues the Court should allow all costs due to Defendants’ failure to contest the costs memo.

The remaining claims in the operative Second Amended Complaint are as follows: (1) failure to pay wages (Labor Code §§ 201-202, 218, 218.5, 1194, 1194.2, 1197.1); (2) failure to provide rest periods (LC § 226.7, § 512, and IWC Wage Orders); (3) failure to pay minimum wage (Labor Code § 1194 et seq.); (4) failure to pay minimum wage (Labor Code §§ 1194 and 1194.2 et seq); (5) failure to pay wages due upon termination: waiting time penalties (Labor Code §§ 201, 202, 203); (6) failure to issue accurate itemized wage statements (Labor Code §226, 226.3); (7) unlawful/unfair business practice (B&PC 17200) and (11) failure to reimburse and indemnify.

The Court denies Plaintiff’s motion for attorney’s fees for the following procedural and substantive reasons:

(1) Motion premature. “Attorney's fees allowable as costs pursuant to subparagraph (B) of paragraph (10) of subdivision (a) may be fixed as follows: (i) upon a noticed motion, (ii) at the time a statement of decision is rendered, (iii) upon application supported by affidavit made concurrently with a claim for other costs, or (iv) upon entry of default judgment. Attorney's fees allowable as costs pursuant to subparagraph (A) or (C) of paragraph (10) of subdivision (a) shall be fixed either upon a noticed motion or upon entry of a default judgment, unless otherwise provided by stipulation of the parties.” No judgment has been entered in this action, nor has a statement of decision resolving this action been entered.

When “prevailing party” status or the “reasonableness” of attorney fees requested must be determined by the trial court, a notice of motion claiming fees for services up to and including rendition of the trial court judgment must be served and filed within the time for filing a notice of appeal (CRC 8.104, 8.108; CRC 3.1702(b)(1); P R Burke Corp. v. Victor Valley Wastewater Reclamation Auth. (2002) 98 Cal.App.4th 1047 (motion “almost always” filed after entry of judgment because until then “there is technically no prevailing party” and “parties may still incur additional fees”).)

The motion seeks recovery of prejudgment attorney’s fees as an element of costs pursuant to CCP §1033.5(a)(10)(A)(contract) and (B)(statutory attorney’s fees). No judgment has yet been entered.

Moreover, Plaintiff’s own briefing concedes that only the wage and hour claims have been resolved and that “[t]here are still the remaining issues of rest break violations, failure to reimburse, and liquidated damages, which are being resolved by stipulation so Plaintiff can move for attorney’s fees.” (Motion, 3:9-11.) On reply, Plaintiff goes so far as to dispute the stipulate fact in the preambles of the Stipulation that the wage and hour claims were resolved by Defendant’s payments at the outset of the action. The motion for prejudgment attorney’s fees is premature given that not all issues have been resolved in this action.

(2) No stipulation to have attorney’s fees resolved prejudgment by motion. Plaintiff argues the parties stipulated that a motion for attorney’s fees would be heard if they reached an impasse in their efforts to informally settle the matter. The Joint Stipulation filed on October 17 and October 26, 2023 only stipulates to “forego the trial date.” (Plaintiff’s Appendix of Exhibits, Ex. 7.) The Joint Stipulation does not contain a formal agreement allowing a motion for prejudgment attorney’s fees to be heard before judgment is entered or before final resolution of this action in one form or another.

Moreover, the mere fact that parties stipulated to having a premature motion for fees to be heard does not entitle them to have it heard. The Court never issued an order approving a premature motion for fees for hearing.

However, in the preamble/background, parties indicate that “if the Parties reach an impasse as to the matter of Plaintiff’s reasonable wage and hour attorney’s fees and other damages, the Parties expressly reserve all rights related to this matter and the Plaintiff may move this Court for reasonable attorney’s fees and costs.” (Plaintiff’s Appendix of Exhibits, Ex. 7.) Even if this preamble were considered an agreement, Plaintiff submits no evidence that the parties reached an “impasse” after attempting to settle the remaining issues.

(3) Failure to identify causes of action on which Plaintiff prevailed. Plaintiff fails to establish that she is prevailing party on specifically identified claims. Plaintiff alleges (1) failure to pay wages (Labor Code §§ 201-202, 218, 218.5, 1194, 1194.2, 1197.1); (2) failure to provide rest periods (LC § 226.7, § 512, and IWC Wage Orders); (3) failure to pay minimum wage (Labor Code § 1194 et seq.); (4) failure to pay minimum wage (Labor Code §§ 1194 and 1194.2 et seq); (5) failure to pay wages due upon termination: waiting time penalties (Labor Code §§ 201, 202, 203); and (6) failure to issue accurate itemized wage statements (Labor Code §226, 226.3).

Plaintiff fails to identify which of these specific Labor Code causes of action she is claiming attorney fees for as prevailing party. Plaintiff indicates Defendants are liable for fees and costs pursuant to Labor Code violations, “unpaid wages (Labor Code § 218), liquidated damages (Labor Code § 1194.2), unpaid overtime, (Labor Code 1194.2), and failure to reimburse for business expenses (Labor Code § 2802).” (Motion, 3:7-9). Plaintiff must identify which of the specific causes of action she believes she prevailed on and the specific code section that entitles her to that fees as to that cause of action.

This is particularly important given that Plaintiff admits there are still outstanding issues to be litigated and she was the losing party on the 8^th through 10^th causes of action and she voluntarily dismissed the 12^th cause of action. In light of these facts, apportionment of fees among those causes of action she failed on and those she prevailed on would be appropriate and necessary. Plaintiff fails to establish that litigation of her Labor Code violation claims overlapped with the litigation of the 8^th through 10^th and 12^th causes of action.

(4) Fee Request Patently Unreasonable and Grossly Inflated. The trial court has broad discretion to determine what constitutes a reasonable fee. (PLCM Group, Inc., (2000) 22 Cal.4th 1084, 1095.) “The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.” (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623-624.) If the Court reduces the requested attorney fees as unreasonable, it is not obligated to justify its decision by identifying specific time entries with which it finds fault. (Id. at 625.) To require otherwise would be inconsistent with the general rule that the trial court is entitled to take all circumstances into account when determining the reasonableness of attorney fees. (Id.) The trial court is therefore not bound by an attorney's evidence in support of his fees. (Vella v. Hudgins (1984) 151 Cal.App.3d 515, 524.)

Fee setting ordinarily begins with the "lodestar," a touchstone figure based on the number of hours reasonably expended multiplied by the reasonable hourly rate. (PLCM Group, Inc., supra, 22 Cal.4th at 1095 (lodestar "presumably reasonable" method for calculating fees).) Under this approach, a base amount is calculated from a compilation of time reasonably spent and reasonable hourly compensation of each attorney. The base amount is then adjusted in light of various factors. (Serrano v. Priest ('Serrano III') (1977) 20 Cal.3d 25, 48.) The lodestar method vests the court with discretion to decide which of the hours expended by the attorneys were reasonably spent on the litigation. (Hammond v. Agran (2002) 99 Cal.App.4th 115, 133.) An award of fees may include not only the fees incurred with respect to the underlying claim but also fees incurred to establish and defend a fee claim. (Serrano v. Priest ('Serrano IV ') (1982) 32 Cal.3d 621, 639.)

“Inflated fee requests constitute a special circumstance…[¶] If ... the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful.” (Christian Research Institute v. Alnor (2008) 165 Cal.App.4^th 1315, 1321-1322.)

“[A]ttorney fees may be awarded only for hours reasonably spent, thus discouraging unnecessary or frivolous litigation. Prevailing parties are compensated for hours reasonably spent on fee-related issues. A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Ketchum v. Moses (2001) 24 Cal.4^th 1122, 1137.)

Assuming Plaintiff is seeking to recover fees in connection with her Labor Code claims, Plaintiff’s requested fees are patently unreasonable. The bulk of litigation in this action involved the 8^th through 10^th causes of action, which Defendants successfully summarily adjudicated. Plaintiff is asking for over $200,000 in fees based on wage and hour claims that were either not litigated or were barely litigated in this action.

In fact, according to the Joint Stipulation’s preambles, Defendants “tendered payments in the amounts of $567.43 on February 21, 2020 and $6,748.47 on July 20, 2020” and these payments “resolved the disputes surviving Defendants’ motion for summary adjudication.”[1] If in fact this is the case, expending over $200,000 in connection with wage and hour claims that were resolved four months into the litigation is unreasonable.

Plaintiff is seeking an award of $316,638 for claims that purportedly yielded payment of $7,315.90 from Defendants. “For a century or more, California courts have considered the success or failure of attorney efforts when evaluating attorney fee requests. The size of a judgment is pertinent to rational evaluation of a requested fee. Rational decisionmaking weighs benefits and costs. The judgment measures the dollar benefit of the litigation. The attorney fee is the cost of obtaining that benefit.” (Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, 746–747.) Given the benefit received, Plaintiff’s request for fees approximately 43 times the amount recovered is patently unreasonable.

(5) Plaintiff must apportion her fees among the wage and hour claims she purportedly prevailed on and the remaining claims. Plaintiff contends all of her fees are recoverable, because her wrongful termination, assault and battery and retaliation claims were inextricably intertwined with her wage and hour claims. Even if that were the case, her wage and labor claims were resolved by July 20, 2020. Any further litigation on the 8^th through 12^th causes of action are not attributable to the wage and hour claims, because those claims were already resolved by July 20, 2020. Based on the statements in the parties’ Joint Stipulation, Plaintiff’s litigation after July 20, 2020 would have been directed solely at the 8^th through 12^th causes of action. As Defendants argue, these facts require that Plaintiff apportion fees amongst her wage and hour claims and all other claims. A reasonable fee would only include those fees attributable to litigation of the wage and hour claims.

Plaintiff argues on reply that apportionment is inappropriate given that there are issues still being litigated. The Court agrees that apportionment is impractical because issues are still being litigated. However, that does not make apportionment improper. The inability to apportion due to unresolved issues in this litigation merely confirms that the motion is premature.

(6) Propriety of Plaintiff’s November 6, 2023 Memorandum of Costs. The Court declines to address the propriety of Plaintiff’s November 6, 2023 Memorandum of Costs and Defendants’ right to file a motion to tax or strike those costs. Those specific issues were not raised or briefed in this motion for attorney’s fees.

[1] The relevant section of the Joint Stipulation appears to be missing words. As written, the preamble makes no sense: “WHEREAS, Defendants’ tendered payments resolved the disputes surviving Defendants’ motion for summary adjudication the following issues unresolved, including but not limited to, missed meal breaks, liquidated damages, failure to reimburse business expenses, interest, and Plaintiff’s alleged attorney’s fees and costs.” (Plaintiff’s Appendix of Exhibit, Ex. 7, Joint Stipulation, 2:15-18.) Parties may have been attempting to indicate that the payments resolved all disputes that survived Defendants’ MSA, except “the following unresolved issues…”