Opinion
INTRODUCTION
Plaintiffs Maria Pellegrino, Nadia Balici, Carolyn Cox, Kelli Maresch, Jennifer McCasland, and James Rossetto (collectively, plaintiffs) sued their former employer, temporary staffing firm Robert Half International, Inc. (RHI), for violations of the wage and hour provisions of the Labor Code and for unfair competition.
RHI challenges the trial court’s attorney fees award on the grounds the court (1) failed to sufficiently discount a portion of plaintiffs’ attorney fees to account for the trial on the unfair competition claims for which no attorney fees were available; (2) should not have applied any multiplier to the lodestar figure in determining the attorney fees award, much less a multiplier as high as 1.75; and (3) improperly awarded an enhancement for “fees on fees.”
BACKGROUND
I.
Pleadings
In the first amended complaint, plaintiffs alleged RHI (1) failed to pay overtime compensation in violation of Labor Code sections 510, subdivision (a), 1194, 201, 202, and 203; (2) failed to provide proper meal and rest breaks in violation of Labor Code sections 512 and 226.7 and Industrial Welfare Commission wage order No. 4-2001 ;
II.
Motions for Summary Judgment and Summary Adjudication
RHI filed motions for summary judgment against plaintiffs. As to each plaintiff except Pellegrino, RHI argued the alleged claims were barred because each plaintiff failed to file his or her lawsuit within six months of the termination of employment as required by the employment agreement each signed.
Each plaintiff (except Pellegrino) filed a motion for summary adjudication on the ground the provision of his or her employment agreement shortening the applicable statutes of limitations was unlawful, and all plaintiffs moved for summary adjudication on the ground RHI’s exemption affirmative defense failed because they did not meet the requirements for any exemption as a matter of law.
After concluding the limitation on claims provision was unenforceable, the trial court denied each of RHI’s motions for summary judgment and granted McCasland’s, Balici’s, Cox’s, Rossetto’s, and Maresch’s motions for summary adjudication on that issue. The court otherwise denied the motions for summary adjudication on the ground a triable issue of material fact existed as to whether plaintiffs were exempt employees.
Trial and Motion for Judgment on the Exemption Defense
Before trial, the court bifurcated plaintiffs’ unfair competition claims and ordered that such equitable claims first be tried to the court without a jury. As agreed to by RHI’s counsel, the court bifurcated the exemption affirmative defense and tried that issue first. After 17 days of trial, and at the close of RHI’s case-in-chief on the exemption affirmative defense, plaintiffs moved for judgment under Code of Civil Procedure section 631.8, arguing they performed a production or sales role in RHI’s day-to-day business, but did not have an impact on RHI’s policies or general business operations and therefore could not be exempt administrative employees. The trial court granted plaintiffs’ motion.
IV.
Stipulation for Judgment As to Remaining Issues and Appeal
On February 4, 2008, the parties entered into a stipulation regarding the remaining issues in the litigation. The judgment was entered, which stated in pertinent part: “The court bifurcated the plaintiffs’ claims under California Business and Professions Code section 17200 and ordered they be tried first to the court sitting without a jury. The court bifurcated the exemption affirmative defense for all plaintiffs and tried the issues presented by that defense without a jury. The court ordered the defense to proceed first because it had the burden of proof on the defense. [<j[] The court having ruled against defendant on the exemption affirmative defense, and the parties having stipulated to the elements of plaintiffs’ prima facie case and the amounts of plaintiffs’ damages and other monetary relief, the court has determined there is nothing further for it or for a jury to determine, and upon (a) the facts stipulated by the parties through their counsel, and (b) the court’s order granting plaintiffs’ motion for judgment.” The trial court ordered judgment in favor of plaintiffs in the amounts set forth in the stipulation.
RHI appealed from the judgment. As set forth in our opinion, Pellegrino v. Robert Half International, Inc. (2010)
By written order, the court granted plaintiffs’ motion for attorney fees, stating as follows:
“The Court having taken Plaintiffs’ motion for attorneys’ fees under submission now rules as follows:
“The Court awards as the [lode]star amount attorneys’ fees apportioned as follows: $435,400.00 to the Shanberg Stafford LLP firm and $222,161.00 to the Quest Law Firm. In addition the Court finds that a multiplier should be applied and a reduction of 15% on the lodestar amount should apply based on the [Business and Professions Code section] 17200 claim.
“The factors to be considered generally in awarding a multiplier include: (1) the novelty and difficulty of the questions involved; (2) the skill displayed in presenting them; (3) the extent to which the nature of the litigation precluded other employment by the attorneys; and (4) the contingent nature of the fee award. [Citation.]
“The Court finds that all 4 factors apply in its evaluation of this request. After considering each factor and evaluating its relationship to the trial and handling of this matter the Court concludes a multiplier of 1.75 is appropriate and awards attorneys fees as follows:
*287 ‘Lodestar amount ($435,400 + $222,161): $657,561.00
“B&P 17200 15% reduction: ($98,634.15)
“Subtotal: $558,926.85
“Lodestar multiplier: 1.75
“Total Fees awarded: $978,121.98
“The Court orders moving parties to prepare all necessary orders, if any, for the Court’s signature and to give notice.”
The court filed an amended judgment providing in part “[t]hat Quest Law Firm and Shanberg Stafford LLP recover from defendant, jointly and severally, attorneys fees in the amount of $978,121.98, with post judgment interest on such amount to accrue from May 20, 2008.” The amended judgment further stated: “Judgment was originally entered on February 8, 2008. That date is the date from which post judgment interest shall accme except for the attorneys fees awarded, which shall accme interest from May 20, 2008. The Judgment is hereby amended only to fill in the amounts of the costs in item 7 and the attorneys fees in item 8 that were left blank in the Judgment entered on February 8, 2008, and to state the date from which interest shall accme on the attorney fees awarded.”
RHI timely appealed from the amended judgment.
DISCUSSION
RHI challenges the award on the grounds the trial court improperly adjusted the lodestar figure by (1) not sufficiently reducing the award to account for the trial of the unfair competition claims for which no attorney fees were available; (2) applying any multiplier to the lodestar figure at all, much less a 1.75 multiplier, because no findings supported doing so; and (3) awarding an enhancement for “fees on fees.”
I.
Standard of Review
“ ‘The standard of review on issues of attorney’s fees and costs is abuse of discretion. The trial court’s decision will only be disturbed when there is no
II.
The Trial Court Did Not Fail to Sufficiently Discount a Portion of Plaintiffs’ Attorney Fees to Account for Trial on the Unfair Competition Claims.
After determining a total lodestar amount of $657,561, the trial court reduced that amount by 15 percent to account for time spent on the unfair competition claims. (Walker v. Countrywide Home Loans, Inc. (2002)
Citing Reynolds Metals Co. v. Alperson (1979)
In Amtower v. Photon Dynamics, Inc. (2008)
Here, the factual and legal issues surrounding RHI’s liability for violation of unfair competition and for plaintiffs’ wage and hour claims could not be more interrelated—in order for plaintiffs to prove unfair competition, they had to prove RHI violated the wage and hour claims upon which the unfair competition claims were based. The only issue tried to the court was whether RHI proved its affirmative defense that plaintiffs qualified under the administrative exemption. As RHI asserted the exemption as an affirmative defense to all claims in this case (other than the claims based on RHI’s failure to pay commissions), the applicability of the exemption to plaintiffs was thus an issue common to legal and equitable claims.
RHI contends apportionment was appropriate because plaintiffs’ unfair competition claims had a four-year statute of limitations as opposed to the three-year statute of limitations that applied to the wage and hour claims. But, notwithstanding the commonality of the legal and factual issues in the unfair competition claims and the wage and hour claims at issue, the trial court decreased the lodestar figure by 15 percent to account for the unfair competition claims. RHI does not explain how the 15 percent reduction was unsatisfactory in accounting for the differential between the claims’ respective statutes of limitations. On this record, the trial court did not abuse its discretion by declining to further reduce the lodestar figure.
RHI argues the trial court erred by failing to explain how it decided on a 15 percent reduction for the unfair competition claims; RHI’s argument is without merit. The California Supreme Court rejected the same argument in Ketchum, supra,
RHI did not request a statement of decision as to the trial court’s ruling on the attorney fees motion. We find no error.
m.
The Trial Court Did Not Abuse Its Discretion by Applying a 1.75 Multiplier to the Lodestar Figure.
RHI argues, “plaintiffs failed to carry their burden of establishing entitlement to a multiplier, and the trial court abused its discretion in awarding one, requiring reversal of the order.” RHI further argues that, even if a multiplier was appropriate to apply in this case, the 1.75 multiplier applied in this case was “inherently unreasonable.”
In Ketchum, supra, 24 Cal.4th at pages 1131-1132, the Supreme Court stated: “Under Serrano III [Serrano v. Priest (1977)
The Supreme Court further stated: “Under Serrano III, the lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded
Here, the trial court’s order stated that it had selected a 1.75 multiplier to calculate plaintiffs’ attorney fees after finding that each of the four factors (described ante in Ketchum, supra,
The record supports the court’s finding as to the novelty and difficulty of the questions at issue in this litigation. This case was vigorously litigated. Twelve motions for summary judgment were filed, which involved separate sets of facts unique to each plaintiff. The case involved complex issues of employment law including the enforceability of a contractually shortened statute of limitations provision contained in an employment agreement and the scope of the administrative exemption for each plaintiff in the context of RHI’s business. Furthermore, RHI’s classification of plaintiffs as exempt employees resulted in RHI not maintaining time and wage records, creating the difficult task of reconstructing records to determine the extent of the wages, penalties, and other damages owed to each plaintiff. Although RHI argues the issues presented in this case were not novel or difficult because no expert witness testified at trial, the record shows RHI designated two “liability” experts and had also retained a damages expert, each of whom were deposed by plaintiffs’ counsel.
RHI does not dispute the amount of time plaintiffs’ counsel asserted was spent litigating this case or that the work was done on a contingency basis. In 10 of the 12 motions for summary judgment and summary adjudication filed, RHI argued its affirmative defense that the limitation on claims provision contained in plaintiffs’ employment agreements barred all claims. Had RHI prevailed on that affirmative defense, plaintiffs’ attorneys would not have been compensated for any work they performed in the case. Furthermore, the bench trial on plaintiffs’ unfair competition claims ended up addressing a single issue—whether RHI’s affirmative defense that plaintiffs were exempt from the wage and hour statutory violations underlying most of their claims. Plaintiffs’ counsel risked not being paid for their work in the event that RHI prevailed on that affirmative defense.
RHI argues, “plaintiffs’ counsel did not present any evidence of any work they had to reject or otherwise lost because of the time commitment they made to this case, before or during trial.” In Amaral v. Cintas Corp. No. 2 (2008)
Furthermore, RHI does not cite any legal authority supporting its argument that a multiplier of 1.75 is inherently unreasonable in this case. In support of their motion for attorney fees, plaintiffs’ counsel submitted the declaration of employment litigator Michelle A. Reinglass, in which she stated that, based on the factors relied upon by the trial court, “it is my opinion that adjusting the lodestar amount in this case by applying a multiplier of between 1.5 and 2.0 is reasonable and justified, and would likely encourage capable counsel to accept contingent representation in non-class action cases of comparable risk, complexity, and significance.” Plaintiffs’ counsel also submitted the declaration of wage and hour litigator Kevin T. Barnes who stated: “In my opinion, based upon the factors set forth in Serrano v. Priest], supra,]
RHI argues the trial court’s abuse of discretion is evidenced by the court’s comments during the hearing on plaintiffs’ attorney fees motion, which, RHI argues, were inconsistent with the final attorney fees award. In Whyte v. Schlage Lock Co. (2002)
Here, we will similarly refrain from using the court’s oral comments during the hearing to impeach the final attorney fees award.
We find no error.
IV.
We Remand to the trial Court to Clarify Its Order As to Any Enhancement for “Fees on Fees.”
RHI argues, “plaintiffs’ counsel sought—and the trial court awarded— attorneys’ fees for time they spent pursuing their attorneys’ fees award. Generally, fees for fee-related litigation (so-called ‘fees on fees’) do not warrant an enhancement. [Citation.] But here, the trial court awarded a multiplier for the entire amount of fees claimed by plaintiffs’ counsel, without subtracting out the amount incurred in prosecuting the attorneys’ fees award. This was error.”
In Ketchum, supra,
In Ketchum, the Supreme Court, however, reversed the attorney fees award and remanded the matter to the Court of Appeal to remand in turn to the trial court because the court had applied a multiplier to fees incurred in seeking fees. (Ketchum, supra,
In Graham v. DaimlerChrysler Corp. (2004)
In Graham v. DaimlerChrysler Corp., supra,
Here, the trial court applied the 1.75 multiplier to attorney fees generated in the underlying litigation and those incurred in the preparation of plaintiffs’ motion for attorney fees. None of the factors cited by the trial court as supporting the 1.75 multiplier applies to the fees incurred in counsel’s motion for prevailing party attorney fees. We therefore remand the matter to the trial court to recalculate the award of attorney fees to eliminate the application of a multiplier to fees incurred solely in the preparation of that motion.
DISPOSITION
We reverse the amended judgment as to the multiplier applied to attorney fees incurred in bringing plaintiffs’ attorney fees motion and remand the matter to the trial court to recalculate those fees accordingly, without a multiplier. We otherwise affirm the amended judgment. In the interest of justice and because both parties prevailed in part on this appeal, no party shall recover costs on appeal.
Rylaarsdam, Acting P. J., and Aronson, J., concurred.
Notes
Business and Professions Code section 17200 et seq.
Pursuant to Evidence Code section 459, subdivision (a) and section 452, subdivision (d), on our own motion, we take judicial notice of the appellate court record in Pellegrino v. Robert Half International, Inc., case No. G039985.
California Code of Regulations, title 8, section 11040.
Although RHI filed a motion for summary judgment against Pellegrino, it was not based on the ground the limitation on claims provision barred her claims because she had filed her lawsuit prior to six months after the termination of her employment with RHI.
Section 1194, subdivision (a) provides: “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.”
Section 226, subdivision (a) requires every employer to provide employees at the time of payment of wages a written itemized statement showing, inter alia, the gross and net wages earned by the employee. Section 226, subdivision (e) provides: “An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.”
Section 218.5 provides 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.”
RHI also argues the attorney fees award must be reversed if this court reverses the underlying judgment in Pellegrino v. Robert Half International, Inc., case No. G039985. As discussed ante, in Pellegrino v. Robert Half International, Inc., supra,
Citing Ramos v. Countrywide Home Loans, Inc. (2000)