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Torres v. Auto Chlor Sys. of Northern California

California Court of Appeals, Sixth District
Sep 25, 2007
No. H029539 (Cal. Ct. App. Sep. 25, 2007)

Opinion


ANGEL TORRES, Plaintiffs and Appellants, v. AUTO CHLOR SYSTEMS OF NORTHERN CALIFORNIA, Defendant and Respondent. H029539 California Court of Appeal, Sixth District September 25, 2007

NOT TO BE PUBLISHED

Santa Clara County Super. Ct. No. CV029956

RUSHING, P.J.

Appellant, Angel Torres, concurrently appeals from the judgment and subsequent order awarding attorney fees and costs. The judgment and fee award order were entered after the trial court granted respondent, Auto Chlor of Northern California’s, motion for summary judgment on appellant’s complaint seeking damages for unpaid overtime and illegal wage deductions. Here, we separately consider the appeal from the order awarding attorney fees pursuant to Labor Code section 218.5. Finding no error or abuse of discretion, we will affirm the judgment.

We dispose of the appeal from the judgment, case number H029368, by separate opinion.

All further statutory references shall be to the Labor Code, unless otherwise specified.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant sued the respondent for unpaid overtime and illegal deductions made while appellant was in respondent’s employ. After the trial court granted the motion for summary judgment, respondent filed a motion to recover attorney fees and costs in the amount of $9,963.25 pursuant to section 218.5. In the motion, respondent claimed that it had incurred a total of $99,631 in fees in defending the action through summary judgment. Respondent calculated the amount of its request by dividing the full amount incurred between the five plaintiffs in the action, and dividing that amount ($19,926.50) by half, based on the assertion that half of appellant’s claims were based on nonpayment of wages, and half the appellant’s claims were based on unpaid overtime. Per section 218.5, respondent only sought to recover fees for the nonpayment of wages claims. Appellant opposed the motion, arguing that none of his claims were for “nonpayment of wages,” and therefore were not subject to an award of attorney’s fees under section 218.5. Appellant did not, however, submit any evidence to rebut Auto Chlor’s showing of the Lodestar. The trial court entered an order awarding the requested fees, finding that the amount requested was “the reasonable attorney fees incurred by Defendant Auto-Chlor on the unlawful deduction from wages claims . . . .” This appeal ensued.

For a complete recitation of the facts of the underlying case, refer to this court’s opinion in H029368, reviewing the appeal from the judgment.

Section 218.5 states in relevant 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. . . . [¶] This section does not apply to any action for which attorney’s fees are recoverable under Section 1194.”

DISCUSSION

On appeal, the appellant again contends that his claims were not subject to the attorney fees provision of section 218.5, and that even if they were, the trial court erred by failing to properly determine what portion of the respondent’s fees are attributable to appellant’s deductions claims. Respondent argues that it is entitled to attorney fees pursuant to section 218.5 and that the trial court properly calculated the fee award.

Applicability of section 218.5

Interpretation of section 218.5 and its application to the circumstances of this case are questions of law, subject to independent review on appeal. (Californians for Population Stabilization v. Hewlett-Packard Co.(1997) 58 Cal.App.4th 273, 294.) Therefore, in determining whether the trial court properly awarded attorney fees pursuant to section 218.5, we review the case de novo.

Appellant first contends that the bulk of his claims were for unpaid overtime, not for unpaid wages. Claims for unpaid overtime are not subject to section 218.5, but instead are subject to section 1194 which is the sole statutory authority for the award of attorney fees upon the successful prosecution of such claims. (Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1429 (Earley).) Respondent, on the other hand, argues that section 218.5 applies to half of appellant’s claims because his claims were based on alleged improper deductions from appellant’s wages, not overtime.

Section 1194, subdivision (a) states, “Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.”

In order to determine which attorney fees statute, if any, is applicable to the appellant’s claims, we must look more closely at the actual causes of action in the complaint to ascertain the nature of the appellant’s claims. In the complaint commencing this action, appellant asserted two claims: that respondent failed to pay for overtime and made illegal deductions from agreed wages. These claims were stated in six causes of action. The first cause of action, entitled “Failure to Indemnify and Illegal Deductions from Wages,” exclusively addressed the wage deduction claims. The second cause of action, entitled “Failure To Pay Overtime Compensation,” addressed exclusively the overtime claims. The third and fourth causes of action, entitled “Failure to Compensate For All Hours Worked” and “Failure to Pay Wages Upon Discharge” respectively, incorporated both the overtime and wage deduction claims. The fifth cause of action, entitled “Waiting Time Penalties Pursuant to Labor Code § 203,” was a claim for penalties under section 203 for “willfully refus[ing] and continu[ing] to refuse to pay [appellant] overtime time in a timely manner . . . .” The sixth cause of action, entitled “Violations of California Business and Professions Code section 17200;” was predicated on both the failure to pay overtime and the wage deductions.

Despite appellant’s contentions to the contrary, the majority of his claims were not seeking to “recover damages for [respondent’s] failure to pay overtime wages.” All the causes of action, with the exception of the second and fifth causes of action, are based, at least in part, on the illegal wage deductions. Therefore, appellant’s argument that section 1194 governs attorney fees awards for overtime claims, is inapposite. Respondent neither sought nor was awarded attorney fees for the overtime payment portion of appellant’s claims. Further, section 1194, subdivision (a) only allows a prevailing employee to recover attorney fees for an unpaid overtime claim, not a prevailing employer, thus respondent could never seek fees under section 1194. (See Earley, supra, 79 Cal.App.4th at p. 1431.)

If appellant intends to suggest that attorney fees are unavailable under section 218.5 for the wage deduction claims because his causes of action are also based on overtime claims, this contention is without merit. There is no authority to support a contention that where there are dual theories of liability, overtime and wage claims, section 1194 would trump any claim for fees under section 218.5. (See generally Earley, supra, 79 Cal.App.4th at pp. 1427-1431 [where claim was only for unpaid overtime, prevailing employer could not seek fees under section 218.5].) Therefore, where both claims are made by an employee and the employer prevails, the existence of overtime claims, for which the employer cannot seek fees, does not preclude a fee award under section 218.5 for the wage deduction claims.

Next appellant contends that section 218.5 does not apply to claims for illegal deduction from wages, but is only available for actions brought for non-payment of contractually agreed upon wages. (Earley, supra, 79 Cal.App.4th at p. 1430.) He argues that the rights he sought to vindicate in his action arose out of the rights guaranteed him under sections 221 and 2928 to be free of unlawful deductions from wages. Therefore, his action is not one for failure to pay “contractually guaranteed wages,” but to enforce his rights under statute to be free of unlawful deductions. These are not mutually exclusive. While a nonpayment of wage claim does not necessarily arise out of an unlawful deduction, unlawful deduction can be the basis for a wage claim. This is so because sections 221 and 2928 proscribe secret deductions or “kickbacks” that make it appear as if an employer is paying wages in accordance with an applicable contract or statute, but in fact is paying less. (Steinhebel v. Los Angeles Times Communications (2005) 126 Cal.App.4th 696.) Since deductions can be the basis of a wage claim, respondent can seek attorney fees pursuant to section 218.5 for such claims.

Section 221 states. “It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee.”

In essence, appellant argues that the deductions were cash fines which he was required to pay out of pocket, not wages which were not paid as agreed upon. This contention ignores the plain facts. Appellant was charged for violations of company policy and required to pay these fines as a condition of continued employment. The fact that the employer did not deduct fines directly from the paycheck does not transform the nature of the fine. The fines directly reduced his full wage every time he violated company rules.

Finally, appellant urges this court to conclude that awarding fees to an employer pursuant to section 218.5 would undermine the public policy underlying that section. Appellant relies on the court’s analysis in Earley, supra, 79 Cal.App.4th 1420. In that case, the prevailing employer in an overtime case sought attorney fees under section 218.5 because under section 1194, fees in an overtime case are only available to a prevailing employee. The employer argued that while the more specific language in 1194 established an employee’s right to fees in an overtime case where he prevails, the more general section 218.5 allowed an employer to recover fees in an overtime case where they prevailed. The Early court held that “To allow employers to invoke section 218.5 in an overtime case would defeat that legislative intent [of encouraging injured parties to seek redress] and create a chilling effect on workers who have had their statutory rights violated. Such a result would undermine statutorily-established public policy.” (Id. at 1431 [emphasis in original].) The court ruled that a prevailing employer could not recover fees in an overtime case either under sections 218.5 or 1194.

The Early public policy analysis is inapposite under the facts of this case, and in making this public policy argument, appellant overlooks the plain language of the statutes. Section 218.5 states that any “prevailing party” may recover fees in a wage case, while section 1194 states that only a prevailing “employee” may recover fees in an overtime case. The public policy discussion in Early focused on the specific distinction the legislature made in carving out overtime claims for special treatment versus other types of wage claims. The Legislature specifically limited availability of fees in overtime claims to prevailing employees. This is why the court in Early properly determined that allowing prevailing employers to recover fees under section 218.5 would undermine the legislative intent behind the express limitation in section 1194.

There is no such stated legislative intent for wage claims based on unlawful deductions. There is no separate statute allowing attorney fees for this type of claim. Therefore, this type of claim falls squarely within the rubric of other nonpayment of wage claims subject to section 218.5. Because that section expressly allows any prevailing party to recover fees, there is no violation of public policy in allowing a prevailing employer to recover these fees.

Apportionment Calculation

Finally, appellant complains that the trial court abused its discretion in apportioning fees in the manner it did. Respondent argues that the court’s apportionment was well within its discretion and was based on the only evidence before it because the appellant did not present any evidence disputing the apportionment put forth by respondent. Apportionment of fees rests within the sound discretion of the trial court. (Washburn v. Berkeley (1987) 195 Cal.App.3d 578, 591-593. Therefore, we review the order apportioning fees for abuse of discretion.

Where a plaintiff sues on dual theories, one of which allows a prevailing defendant to recover fees and one of which does not, the trial court has discretion to apportion fees to claims authorizing attorney fee awards. (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1180 [where plaintiff brought suit for unfair competition, which does not provide for fees for prevailing defendant, as well as other claims authorizing attorney fees for prevailing defendant, trial court has discretion to apportion fees to non unfair competition claims].) Because appellant’s wage claims entitle the prevailing respondent to attorney’s fees, pursuant to section 218.5, the court had the discretion to apportion fees attributable to those claims.

Appellant also complains that the trial court did not properly determine apportionment, and requests that we remand to the trial court for further hearing on apportionment. However, appellant did not present evidence to dispute the respondent’s apportionment proposal at the trial court. That proposal was to divide the total amount of fees, $99,631 among the five plaintiffs equaling $19,926.50 each. Then to divide the $19,926.50 in half, on the premise that half of the appellant’s claims were attributable to the wage claims, and not the overtime claims. That amount, $9,963.25, is the amount requested and awarded by the trial court.

Although, appellant now complains that the trial court should have considered the actual work done on each claim, that argument is without merit. Where a lawsuit consists of related claims, a trial court has discretion to award all or substantially all of the attorney fees even if the court did not adopt each contention raised. (Downey Cares v. Downey Community Development Com. (1987) 196 Cal.App.3d 983, 997.) Although it is appropriate to reduce a fee award when a party is only entitled to fees as to some of the claims pled (see Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231), the trial court is in the best position to understand the relationship between the claims, and to determine whether time spent on a related claim contributed to the claims. (Greene v. Dillingham Construction N.A., Inc. (2002) 101 Cal.App.4th 418, 423.) The trial court here determined that appellant’s claims were based on two theories, overtime and unlawful deductions. Because only the wage claims were subject to attorney fees, the court determined to split the fees attributable to plaintiff in half. Where the court would have had the discretion to award substantially all of the fees attributable to plaintiff, we cannot say that the court abused its discretion in awarding half, on the premise that respondent was entitled to fees for half the appellant’s claims.

DISPOSITION

The order awarding fees is affirmed.

WE CONCUR: PREMO, J., ELIA, J.

Section 2928 states, “No deduction from the wages of an employee on account of his coming late to work shall be made in excess of the proportionate wage which would have been earned during the time actually lost, but for a loss of time less than thirty minutes, a half hour's wage may be deducted.”


Summaries of

Torres v. Auto Chlor Sys. of Northern California

California Court of Appeals, Sixth District
Sep 25, 2007
No. H029539 (Cal. Ct. App. Sep. 25, 2007)
Case details for

Torres v. Auto Chlor Sys. of Northern California

Case Details

Full title:ANGEL TORRES, Plaintiffs and Appellants, v. AUTO CHLOR SYSTEMS OF NORTHERN…

Court:California Court of Appeals, Sixth District

Date published: Sep 25, 2007

Citations

No. H029539 (Cal. Ct. App. Sep. 25, 2007)