Judge Lynne M. Hobbs, Case Number: 20STCV24520, Date: 2024-08-06 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 20STCV24520, Date: 2024-08-06 Tentative Ruling

Case Number: 20STCV24520 Hearing Date: August 6, 2024 Dept: 61

RAYMOND CHEUNG, et al. vs AMERICAN GEZHI-MART CORPORATION, et al.

TENTATIVE

Plaintiffs Raymond Cheung et al.’s Motion for Attorney Fees is GRANTED in the amount of $98,750.00.

Moving party to give notice.

DISCUSSION

“Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided.” (Code Civ. Proc., § 1021.)

“In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.” (Civ. Code, § 1717, subd. (a).) “[T]he party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract.” (Civ. Code, § 1717, subd. (b)(1).)

“In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney's fees and costs to the prevailing party if any party to the action requests attorney's fees and costs upon the initiation of the action.” (Lab. Code, § 218.5.)

In determining the proper amount of fees to award, courts use the lodestar method. The lodestar figure is calculated by multiplying the total number of reasonable hours expended by the reasonable hourly rate. “Fundamental to its determination . . . [is] a careful compilation of the time spent and reasonable hourly compensation of each attorney . . . in the presentation of the case.” (Serrano v. Priest (1977) 20 Cal.3d 25, 48 (Serrano III).) A reasonable hourly rate must reflect the skill and experience of the attorney. (Id. at p. 49.) “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.” (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 (Serrano IV).) The Court in Serrano IV also stated that fees associated with preparing the motion to recover attorneys’ fees are recoverable. (See id. at p. 624.)

Plaintiffs Raymond Cheung et al. (Plaintiffs) seek $98,750.00 in attorney fees against Defendants American Gezhi Mart Corporation, Zhaozhong Zhou, Lohas Fresh Mart Alhambra, and Jbros Investment, LLC, following a judgment entered in Plaintiffs’ favor against these defendants. (Motion at pp. 3–7.) They base this request for fees on Labor Code § 218.5, which allows attorney fees for plaintiffs prevailing on unpaid wages claims, and on Civil Code § 1717, which permits contractual attorney fees where provided for in the contract at issue. (Ibid.) Sixteen (16) of the Plaintiffs are employees who prevailed on their wage claims, and one of the sixteen (16) vendor Plaintiffs, Big Green USA, Inc., had a contractual attorney fees provision with Defendant Zhaozhong Zhou. (Motion at p. 3.)

Plaintiffs also seek attorney fees under 1717.5 for the vendor defendants, which allows attorney fees to a party prevailing on an open book account in an amount that shall not exceed the lesser of (1) $960 for obligations owed by a natural person for personal or family services, (2) $1,200 for all other accounts, or (3) 25% of the principal recovery. (Civ. Code § 1717.5, subd. (a).)

Defendants in opposition argue that Plaintiffs have failed to apportion their fees among the employee plaintiffs, who may claim fees under Labor Code § 218.5, and the vendor plaintiffs, most of whom have no contractual right to attorney fees, and only a limited right to fees under Civil Code § 1717.5. (Opposition at pp. 3–8.) Defendants argue that under Civil Code § 1717.5, the vendor Plaintiffs (other than Big Green USA, who had a contract for attorney fees) may obtain a maximum aggregate of fees amounting to $13,273.53, based on a proportion of the principal awarded. (Opposition at pp. 6–8.) Defendants argue that Plaintiffs have not presented payments among the parties to show which fees were paid by which party. (Opposition at p. 8.)

Plaintiffs have shown entitlement to attorney fees, and have provided detailed time records indicating the reasonableness of the fees sought. Defendants are only partly correct when they argue that the vendors are not entitled to the full scope of fees provided under Labor Code § 218.5, and that fees must be apportioned among the prevailing plaintiffs. It is true that “[w]hen a cause of action for which attorney fees are provided by statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the statutory cause of action. (Santana v. FCA US, LLC (2020) 56 Cal.App.5th 334, 349.) At the same time, “fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed.” (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129–30.) Thus fees need not be apportioned when incurred on issues common to both fee-claims and no-fee claims.

Plaintiffs’ time records reveal only a small portion of the fees incurred — $6,000.00, representing twelve hours of attorney work at $500 per hour, across 68 entries in the time logs (Jardins Decl. Exh. B) —were exclusively for the benefit of the non-contract vendor Plaintiffs. The remainder was incurred to address issues and circumstances common to both the employee and vendor plaintiffs, and are therefore compensable under Labor Code § 218.5, regardless of apportionment.

Moreover, because the amount of fees incurred solely for these non-contract vendors is less than the $13,273.53 that Defendants apportion to them under Civil Code § 1717.5, there is no cause to reduce the lodestar recovery to account for this amount, as these plaintiffs are entitled to recover the $6,000.00 under that statute.

Nor is there any requirement that Plaintiffs present the actual records of who paid the attorney fees, or that they have been paid at all. The text of Labor Code § 218.5 contains no requirement that the fees sought be actually incurred, and neither Civil Code § 1717 or 1717.5 require the same. (See Civ. Code § 1717.5, subd. (a) [outlining pre-set fee recovery amounts]; See Beverly Hills Properties v. Marcolino (1990) 221 Cal.App.3d Supp. 7, 11 [holding that fees under Civil Code § 1717 need not be actually incurred].)

The motion is therefore GRANTED in the amount of $98,750.00.