Ramos v. Garcia

         APPEAL from an order of the Superior Court of San Diego County, No. 37-2013-00037990- CU-OE-CTL William R. Nevitt, Jr., Judge.

          Law Offices of Douglas A. Cleary and Douglas A. Cleary for Plaintiff and Appellant.

          Arizmendi Law Firm and Ruben F. Arizmendi for Defendant and Respondent.

          HUFFMAN, J.

         Rogelio Ramos (Appellant) sued his former employers, Jose Robledo and Dora Garcia ("the two employers"; nonparties in this appeal), seeking to recover unpaid overtime, minimum wages and other compensation, and to impose job-related penalties. (Lab. Code, ^[1] §§ 1194, 226.7, 201, 203 [waiting time for payment], 226, subd. (f) [failure to turn over wage records].) Appellant obtained some of the monetary recovery he requested against the two employers. However, Appellant had also sued Manuel Garcia ("Respondent"), claiming he was an employer, but Appellant lost on all those claims as to Respondent, when the court found that Respondent was a manager and co-employee of the business, not an owner/employer.

         Following trial, the court awarded Respondent attorney fees, as the "prevailing party" under section 218.5, which is commonly referred to as a two-way fee shifting provision. (Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1258 (Kirby).) Appellant argues on appeal that the award of attorney fees to Respondent must be reversed because the statutory requirements of sections 218.5 and 1194 do not allow an award of attorney fees under these circumstances, in which Respondent was a prevailing employee defendant. We agree that the attorney fees award is not supported by the record and reverse with directions.

         FACTUAL AND PROCEDURAL BACKGROUND

         Appellant brought several statutory causes of action against his two employers, and also sought an award of attorney fees in his complaint as amended.^[2]

         After trial, Appellant received an award against the two employers for unpaid overtime and minimum wage compensation, in the amount of $7, 747.50 plus interest (on his § 1194 claims). He also was awarded penalties against his two employers for the waiting time before wages were paid ($3, 052.50, under § 203), and for the delay in records provision ($750, under § 226 subd. (f)). Appellant lost on his claims for meal and rest period compensation (§ 226.7) against all defendants.

         Respondent prevailed on all of Appellant's claims, as he was found to be a manager, not an employer. Respondent then filed a motion seeking an award of attorney fees against Appellant. Respondent argued that as a prevailing party, he was entitled to an award of attorney fees under section 218.5.^[3] Respondent alleged that Appellant brought the action in bad faith, claiming "it was reasonably clear from the beginning that [Respondent] was not a proper defendant in the case and that he was not liable for any violations alleged in [Appellant's] complaint."

         The court granted Respondent's motion for attorney fees, determining he was a prevailing party under section 218.5. The ruling specifically noted that it was not necessary for the court to find that Appellant brought the action against Respondent in bad faith, in order to award Respondent (an employee) attorney fees pursuant to section 218.5. In calculating the amount of the award, the court deducted the time incurred by Respondent's counsel attributable to defending the codefendant, employer Dora Garcia, and it thus awarded only the amount of time recorded for Respondent's defense. The total fees award against Appellant was $29, 295.

         DISCUSSION

         Appellant argues the trial court erred in awarding attorney fees to Respondent under section 218.5 because the statutory requirements were not met, or alternatively, both sections 1194 and 218.5 only allow an award of attorney fees to a prevailing employee plaintiff, which Respondent was not. In contrast, Respondent contends that as a "prevailing aggrieved employee" who was a defendant, he is entitled to attorney fees under section 218.5 on all claims, or alternatively under section 1194 to the extent he defeated Appellant's overtime claim.

         I

         LEGAL PRINCIPLES FOR REVIEW

         The interpretation of a statute on a set of established facts is a question of law subject to our independent review. When presented with pure questions of law, our review standard is de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 801.)

         "We independently review questions of statutory construction. [Citation.] In doing so, 'it is well settled that we must look first to the words of the statute, "because they generally provide the most reliable indicator of legislative intent." [Citation.] If the statutory language is clear and unambiguous our inquiry ends. "If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs." [Citations.] In reading statutes, we are mindful that words are to be given their plain and commonsense meaning. [Citation.] We have also recognized that statutes governing conditions of employment are to be construed broadly in favor of protecting employees. [Citations.] Only when the statute's language is ambiguous or susceptible of more than one reasonable interpretation, may the court turn to extrinsic aids to assist in interpretation.' " (Kirby, supra, 53 Cal.4th at p. 1250.) In addition, " ' "significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose"[;] [citation] "a construction making some words surplusage is to be avoided." ' " (Id. at p. 1253.)

         A statute should not be read in isolation, "but construed in context and ' "with reference to the whole system of law of which it is a part so that all may be harmonized and have effect." ' " (Compulink Management Center, Inc. v. St. Paul Fire and Marine Ins. Co. (2008) 169 Cal.App.4th 289, 296.)

         II

         STATUTORY SCHEMES FOR PREVAILING PARTY COSTS AND FEES

         A. Provisions of Section 218.5

         Section 218.5 is a two-way fee shifting statute, permitting an award of attorney fees to either employees or employers who, as relevant here, prevail on an "action brought for the nonpayment of wages, " or "on account of nonpayment of wages." (Kirby, supra, 53 Cal.4th at pp. 1256-1258; Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1429 (Earley).) If the employee's action was instead brought to remedy an employer's legal violation (i.e., failure to provide a mandatory meal/rest break; § 226.7), there is no basis for awarding fees under section 218.5 (or under § 1194). (Kirby, supra, at pp. ...