13 Cal.App.5th 29
Cal. Ct. App.2017Background
- Michael Shames sued his former nonprofit employer, Utility Consumers' Action Network (UCAN), after termination, alleging multiple claims including breach of contract for unpaid incentive bonuses (over $141,000) and several Labor Code claims.
- The operative pleading was a first amended complaint asserting seven causes of action; it did not include a general prayer for attorney fees and placed limited references to attorney fees within specific counts.
- Paragraph 52 of the first amended complaint (in the Labor Code §203 "waiting time" count) referenced Labor Code §218.5 and alleged $3,000 in attorney fees incurred negotiating payment; the breach-of-contract/count for unpaid bonuses (count 7) had no §218.5 request.
- After a jury verdict favoring Shames on the breach-of-contract bonus claim (award of $141,544), Shames moved for postjudgment attorney fees under Labor Code §218.5 (and §226(e)); he sought roughly $136,721.25.
- The trial court awarded $2,000 under §226 but denied fees under §218.5, reasoning §218.5 requires a request for fees "upon the initiation of the action" (i.e., in the operative/initial pleading) and Shames’ amended complaint did not sufficiently request §218.5 fees as to the nonpayment-of-wages claim.
- Shames appealed; the Court of Appeal affirmed, holding the §218.5 reference in a separate count (count 4) did not give adequate notice that Shames sought §218.5 fees for his breach-of-contract (nonpayment-of-wages) claim in count 7.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §218.5 requires a request for attorney fees in the initial pleading (or whether an amended pleading may suffice) | Shames: amended (operative) complaint’s reference to §218.5 satisfied any "initiation" notice requirement | UCAN: the request must be made upon initiation (initial pleading); Shames did not request §218.5 fees as to the wage claim | Court: did not decide the categorical initial-vs-amended pleading issue because Shames’s amended pleading anyway failed to request §218.5 fees for the wage claim |
| Whether a §218.5 reference located in a different count (§203 waiting-time count) puts defendant on notice that plaintiff seeks §218.5 fees for a separate nonpayment-of-wages claim (breach-of-contract count) | Shames: reading the complaint as whole put UCAN on notice that he sought §218.5 fees for nonpayment-of-wages claims | UCAN: the §218.5 language was tied to the §203 waiting-time claim and did not give notice for fees on the separate bonus breach-of-contract claim | Held: §218.5 mention in count 4 did not reasonably request fees for the separate wage claim in count 7; notice insufficient |
| Whether Shames’s answer to UCAN’s cross-complaint (which requested fees) satisfied §218.5’s request-upon-initiation requirement | Shames: answer to cross-complaint requested attorneys’ fees, fulfilling requirement | UCAN: cross-complaint was not an action "brought for the nonpayment of wages," so answer request cannot suffice for §218.5 | Held: answer to cross-complaint insufficient because cross-complaint did not assert a §218.5-type wage claim |
| Whether the trial court abused discretion in denying §218.5 fees given policy favoring fee awards to prevailing wage claimants | Shames: policy and legislative purpose of §218.5 favors awarding fees to prevailing employees who sue for unpaid wages | UCAN: statutory text requires a timely pleading request and notice; plaintiff failed that requirement | Held: Court applied statute as written; could not read out the pleading/notice requirement despite sympathetic policy considerations |
Key Cases Cited
- Kirby v. Immoos Fire Protection, Inc., 53 Cal.4th 1244 (Cal. 2012) (explains §218.5 covers actions "brought on account of nonpayment of wages" and is a two-way fee-shifting statute)
- Brandt v. Superior Court, 37 Cal.3d 813 (Cal. 1985) (distinguishes attorney fees sought as damages from statutory fee shifting)
- Aleman v. AirTouch Cellular, 209 Cal.App.4th 556 (Cal. Ct. App.) (interprets "any action" in §218.5 as referring to a cause of action)
- Vasquez v. State of California, 45 Cal.4th 243 (Cal. 2008) (court’s role is to declare statutory text; cannot rewrite statute to achieve policy ends)