Judge: Michael E. Whitaker, Case: 19SMCV00394, Date: 2024-11-21 Tentative Ruling

Case Number: 19SMCV00394    Hearing Date: November 21, 2024    Dept: 207

TENTATIVE ruling

MOTION

This case arises from allegations that Defendants Tax Credit Group and Pejman J. Sage (“Defendants”) failed to adequately compensate Plaintiff Adrienne Doustkam (“Plaintiff”) for her employment with Defendants. 

On December 13, 2021, the Court granted Defendant’s motion for summary adjudication as to five of Plaintiff’s causes of action.  (Minute Order, Dec. 13, 2021.)  On March 15, 2022, Plaintiff stipulated to entry of judgment and dismissed with prejudice the remaining causes of action. 

On September 12, 2022, the Court granted in part Defendants’ motion for attorneys’ fees pursuant to Labor Code section 218.5.  In so holding, the Court found that Defendants were the “prevailing parties” and that Plaintiff had brought the action in bad faith.  (Minute Order, Sept. 12, 2022.)   Plaintiff appealed the judgment. 

On July 1, 2024, the appellate court affirmed the judgment and issued the Remittitur on September 4, 2024. 

Defendants now seek their attorneys’ fees and costs incurred on appeal, pursuant to Labor Code section 218.5.  The motion is unopposed.

REQUEST FOR JUDICIAL NOTICE

            Defendants request judicial notice of the following:

1) The Minute Order Granting Defendants’ Motion for Summary Adjudication, entered December 13, 2021, a true and correct copy of which is attached as Exhibit “2.”. In that Order, the Court ruled that the first six causes of action in Plaintiff’s SAC (breach of contract, fraud, quantum meruit, unjust enrichment, failure to pay wages under Labor Code §201 and statutory penalties under Labor Code § 203) all were claims for non-payment of wages.

2) The Stipulation and Order re: Judgment of Dismissal, a true and correct copy of which is attached as Exhibit “3.” That Order demonstrates that Plaintiff dismissed her remaining causes of action with prejudice, meaning they were not part of her appeal.

3) Plaintiff’s notice of appeal of this Court’s ruling granting Defendants’ MSA, a true and correct copy of which is attached as Exhibit “4.”

4) The Minute Order awarding certain allowable litigation costs to Defendants dated June 6, 2022, a true and correct copy of which is attached as Exhibit “5.”

5) Plaintiff’s notice of appeal of this Court’s ruling awarding certain allowable litigation costs to Defendants, a true and correct copy of which is attached as Exhibit “6.”

6) The Minute Order awarding Defendants $156,893.84 in attorney’s fees dated Sept. 12, 2022, a true and correct copy of which is attached as Exhibit “7.”

7) Plaintiff’s notice of appeal of this Court’s ruling awarding Defendants $156,893.84 in attorney’s fees, a true and correct copy of which is attached as Exhibit “8.”

8) Plaintiff’s Jan. 10, 2024 notice of substitution of counsel, a true and correct copy of which is attached as Exhibit “9.”

9) The September 4, 2024 Remittitur with the Opinion attached issued by the Second District Court of Appeal affirming all of this Court’s prior rulings in their entirety, a true and correct copy of which is attached as Exhibit “10.”

Judicial notice may be taken of records of any court in this state.  (Evid. Code, § 452, subd. (d)(1).)  Because the requested exhibits are all part of the Court’s record for this case, the Court may take judicial notice of them.  (Ibid.)   However, “while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.  Courts may not take judicial notice of allegations in affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof.”  (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [cleaned up].) 

Accordingly, the Court takes judicial notice of the existence of the requested exhibits, including the truth of results reached, but not the truth of any hearsay allegations contained therein.

LEGAL STANDARD

Code of Civil Procedure section 1033.5, which outlines recoverable costs to a prevailing party under Code of Civil Procedure section 1032, permits the recovery of attorneys’ fees when authorized by contract, statute, or law.  (Code Civ. Proc.. § 1033.5, subd. (a)(10).)  Code of Civil Procedure section 1021 provides “[e]xcept 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 [….]” 

The Code of Civil Procedure defines the “prevailing party” as follows:

[T]he party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.

(Code Civ. Proc., § 1032, subd. (a)(4).)

Labor Code section 218.5, subdivision (a) provides in pertinent part:  “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. However, if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith.”     

Thus, Labor Code section 218.5 allows an employer to recover attorney’s fees “only if the court finds the employee brought the court action in bad faith.” “The legislative history indicates the Legislature intends employers to recover fees when they ‘defeat frivolous claims,’ which ‘would align the statute with the state and federal civil rights and employment statutes.’ (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 462 (2013-2014 Reg. Sess.) July 2, 2013, p. 4).” (Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (2018) 18 Cal.App.5th 525, 545.) “A prevailing defendant, however, should not be awarded attorneys' fees unless the court finds the action was objectively without foundation, or the plaintiff continued to litigate after it clearly became so.” (Williams v. Chino Valley Independent Fire Dist., (2015) 61 Cal.4th 97, 115.)

DISCUSSION

1.     Entitlement to Fees

            There is no dispute that Defendants are the prevailing parties, both in the proceedings in this Court and on appeal. The primary question is whether the appeal was brought in bad faith.

            In awarding Defendants’ attorneys’ fees in part pursuant to Labor Code section 218.5, the Court previously determined that “Plaintiff’s wage claims had no objective, factual basis but instead were premised solely on her unsupported belief that Defendants must have been withholding payments due to her because they had not paid her any such commissions by October 2016 even though she apparently felt some commissions must have been due to her.”  (Minute Order, Sept. 12, 2022 at p. 5.)  As such, the Court found “Plaintiff’s causes of action against Defendant are deemed to have been raised in bad faith as the term is used in Labor Code § 218.5.”  (Id. at p. 6.)

            Similarly, on appeal, the appellate court affirmed the grant of summary adjudication and award of attorneys’ fees, including the Court’s finding that Plaintiff brought suit in “bad faith” under Labor Code section 218.5, because, despite a diligent inquiry, Plaintiff was unable to uncover any evidence that Defendants had withheld any commission payments owed to Plaintiff. 

            As such, the Court finds Plaintiff similarly had no good faith ground upon which to appeal those findings.  Therefore, Plaintiff also filed the appeal in “bad faith” as that term is used in Labor Code section 218.5 and Defendants are generally entitled to their attorneys’ fees and costs incurred on appeal.

2.     Reasonableness of Fees Sought

Defendants seek the following attorneys’ fees:

Mark Share (Partner) – 14.5 hours (appeal) - $585/hr = $8,482.50

Mark Share (Partner) – 9.5 hours (appeal) $635/hr = $6,032.50

Mark Share (Partner) – 5 hours (fee motion) $635/hr = $3,175

Martha Cohen (Contract Attorney) – 29.5 hours (appeal) $330/hr = $9,735

Craig Newton (Contract Attorney) – 15 (fee motion) $395 = $5,925

            The Court does not find the hourly rates or the fees incurred on appeal unreasonable, and Plaintiff has not opposed the motion to argue otherwise.  However, the Court does find expending 20 hours on this fee motion alone to be excessive.  As such, the Court declines to award 10 hours incurred by Craig Newton on the fee motion.

3.     Costs

Defendants also seek $433.20 in costs incurred on appeal, representing $390 in filing fees and $43.20 incurred in the transmitting, filing, and serving of the record, briefs, and other papers.  (See Memorandum of Costs.)  The Court of Appeal expressly held that Defendants were entitled to their costs incurred on appeal.  Further, because the judgment and attorney fee order were affirmed in their entirety, Defendants are the prevailing parties on appeal.  Therefore, Defendants’ request for costs is granted.

Conclusion

Therefore, the Court grants in part Defendants’ unopposed motion for attorneys’ fees and costs.  Moving Defendants are entitled to recover a total of $29,833.20, representing $29,400 in attorneys’ fees and $433.20 in costs.   

Moving Defendants shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith.  Further, Defendants shall serve and lodge with the Court a proposed Order and Judgment in conformance with the Court’s ruling on or before December 13, 2024. 

DATED:  November 21, 2024                                               ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court