Judge: Stephen P. Pfahler, Case: 20CHCV00327, Date: 2023-11-02 Tentative Ruling

Case Number: 20CHCV00327    Hearing Date: November 2, 2023    Dept: F49

Dept. F-49

Date: 11-2-23

Case #: 20CHCV00327

ATTORNEY FEES

MOVING PARTY: Defendant, Design Masonry, Inc., et al.

RESPONDING PARTY: Unopposed/Plaintiff, Antonio Armenta

RELIEF REQUESTED

Motion for Attorney Fees

SUMMARY OF ACTION

Plaintiff Antonio Armenta was hired as a brick mason assistant, a tender, with Defendant Design Masonry, Inc. Plaintiff alleges Defendant Erik Doyle, Vice President of Operations, “hired him on behalf of” Design Masonry, Inc. Defendant Scott Floyd is the “President/Owner, leader and principal of” Design Masonry, Inc.

On October 27, 2018, Plaintiff sustained an on the job injury. Plaintiff denies he was deprived of Workers’ Compensation medical care and accused of “lying” about his injury. Regardless, Plaintiff sought out medical care and incurred $125 in costs for a prescription, which he presented to Doyle for reimbursement. The amount was not paid. Plaintiff was terminated on an unspecified date sometime after the injury occurred.

Plaintiff alleges he was terminated because of his Mexican ethnicity. Plaintiff also alleges working overtime without compensation or statutorily required breaks.

On June 1, 2020 and June 15, 2020, Plaintiff filed a complaint and first amended complaint for Wage and Hour Violations, Race Based Discrimination in Violation of FEHA, Wrongful Termination, Breach of Covenant of Good Faith and Fair Dealing, and Breach of Contract.

On December 8, 2020, the court overruled the demurrer to the Breach of Covenant of Good Faith and Fair Dealing, and Breach of Contract in the first amended complaint, denied the motion to strike Allegations in Support of, and Claim for, Punitive Damages, and granted the motion to strike Attorney Fees and Costs Pursuant to Common Fund Doctrine and Claim of Physical and Emotional Injury in Conjunction with Breach of Contract Claim. Defendant answered the first amended complaint on December 22, 2020.

On July 26, 2023, following a bench trial, the court found in favor of Defendants. The court entered judgment on August 14, 2023.

RULING: Denied.

Defendant, Design Masonry, Inc., Scott Floyd, and Erik Doyle moves for the recovery of $89,478.20 in attorney fees. Defendants contend statutory authority allows for recovery of fees as prevailing parties. Plaintiff filed an “objection” to the “request for attorney fees” on grounds that Defendants fail to establish a basis of recovery under the lack of good faith showing required by the statute. Plaintiff also challenges recovery of fees on non-FEHA claims. The court electronic filing system shows no reply at the time of the tentative ruling publication cutoff.

Defendants move for attorney fees as part of their memorandum of costs. 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; but parties to actions or proceedings are entitled to their costs, as hereinafter provided.” A prevailing party in entitled to recover costs, including attorneys’ fees when authorized by statute. (Code Civ. Proc., §§ 1032, subd. (a)(4); 1033.5, subd. (a)(10)(B).) Code of Civil Procedure section 1032(a)(4) defines a prevailing party as: “[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...” Defendants prevailed in the bench trial and properly filed their motion for attorney fees.

Under the traditional statutory approach, a motion for attorney fees must be served and filed within the time for the filing of a notice of appeal in a civil case. (Cal. Rules Ct., rule 3.1702(b)(1).) The time for the filing of a notice of appeal in an unlimited action is 60 days if a “Notice of Entry” of Judgment was served by the court clerk or a party to the action, or within 180 days of entry of judgment. (California Rules of Court rule 8.104.) Judgement was entered on August 14, 203. The motion was filed five days before entry of judgment. The motion is therefore timely under California Rules of Court rule 3.1702(b)(1).

The court only considers the motion for attorney fees, and otherwise declines to address any potential arguments for the recovery of costs. The July 26, 2023, order of the court instructed Plaintiff to file any motion to tax in order to challenge the otherwise automatic award of costs upon the lapse of the deadline. The burden remained with Plaintiff to challenge costs. “After the time has passed for a motion to strike or tax costs or for determination of that motion, the clerk must immediately enter the costs on the judgment.” (Cal. Rules of Ct., rule 3.1700(b)(4).)

Defendants rely on Government Code section 12965, subdivision (b), which in a prior version to the statute stated in relevant part: “In civil actions brought under this section, the court, in its discretion, may award to the prevailing party, ... , reasonable attorney's fees ... except that, ... a prevailing defendant shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.” On June 30, 2022 and January 1, 2023, the legislature amended the statute subdivision to read as follows: “(b) For purposes of this section, filing a complaint means filing a verified complaint.” (Gov. Code, § 12965, subd. (b).) The entire section providing for fee recovery to a prevailing party on a frivolous complaint was removed from the section.

The complaint itself was filed in June 2020. The language regarding the frivolous action was in effect at the time of the 2020 filed action. Neither party addresses the revision of the statute and whether the revised statute applies, or whether the court should address the relied upon version at the time of the filing of the complaint.

“‘[L]egislative enactments are generally presumed to operate prospectively and not retroactively unless the Legislature expresses a different intention’” (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1208; Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 844 [“[A] statute may be applied retroactively only if it contains express language of retroactivity or if other sources provide a clear and unavoidable implication that the Legislature intended retroactive application”].) “[A] statute's retroactivity is, in the first instance, a policy determination for the Legislature and one to which courts defer absent “some constitutional objection” to retroactivity.” (Myers v. Philip Morris Companies, Inc., supra, 28 Cal.4th at p. 841.) “But it has long been established that a statute that interferes with antecedent rights will not operate retroactively unless such retroactivity be ‘the unequivocal and inflexible import of the terms, and the manifest intention of the legislature.’” (McClung v. Employment Development Dept. (2004) 34 Cal.4th 467, 475.)

The court finds the 2020 version of the statute applicable and therefore considers the frivolous action standard. Defendants rely on the finding of the court whereby the court found Plaintiff failed to meet the burden of proof for recovery. Recovery of fees to the prevailing party lies with the discretion of the court. (Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 109.) Asymmetrical denial of recovery thereby relieving a Plaintiff from potential fees where the employer prevails finds support in the public policy. California allows an aggrieved employee to bring a potentially meritorious action without fear of harmful economic loss through the recovery of attorney fees to the prevailing defendant in cases deemed sufficient for presentation to a court. (Id. at p. 114.) A prevailing defendant therefore only recovers fees and costs upon a finding that the underlying action lacked objective foundation of validity at the time of commencement. (Id. at. p. 115; Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1388.) The objective standard was established by the United States Supreme Court. (Christiansburg Garment Co. v. Equal Employment Opportunity Commission (1978) 434 U.S. 412, 422 [98 S.Ct. 694, 701, 54 L.Ed.2d 648].) The standard was articulated as “frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so.” (Ibid.)

In the statement of decision, the court specifically characterized the action as a “close call” requiring the weighing of credibility, as well as consideration of economic factors impacting company human resource decisions. In finding a lack of sufficient evidence regarding an intentional, adverse and discriminatory employment action, the court also specifically found that Plaintiff was entitled to at least bring the claim on the basis of termination, and as a member of a protected class of employee. Nothing in the ruling of the court in any way finds support for the presentation of an objectively unmeritorious claim. Again, the court acknowledges the public policy against the requirement for an “air tight” claim under the risk of severe adverse economic penalty. The failure to “achieve success” on a claim versus the knowing prosecution of a meritless action will not lead to the imposition of attorney fees in favor of the employer. (Cummmings v. Benco Building Services, supra, 11 Cal.App.4th at p. 1390.)

As for a potential basis for the imposition of fees on the non-FEHA related attorney fees, the court also finds no support for recovery. The motion lacks any basis of statutory authority. Nothing in the motion establishes a common core or right between the wage and hour claims and the wrongful termination claims, even if the court found the FEHA related claims frivolous. (Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1063.)

On costs, again, the court specifically awarded costs. As addressed above, Plaintiff was ordered to file a motion to tax. Even considering the argument, Plaintiff presents no specific challenge seeking to parse out costs between the FEHA and non-FEHA claims. “Unless the FEHA claim was frivolous, only those costs properly allocated to non-FEHA claims may be recovered by the prevailing defendant.” (Roman v. BRE Properties, Inc., supra, 237 Cal.App.4th 1040, 1062.)

The court therefore denies the motion for attorney fees, and otherwise declines to consider potentially unmade arguments that should have been properly raised as a motion to tax costs.

Defendant to give notice.