Deven v. Dynamic Auto Images CA4/3 ( 2014 )

Filed 1/22/14 Deven v. Dynamic Auto Images CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
NIKOLE DEVEN,
Plaintiff and Appellant, G048064
v. (Super. Ct. No. 30-2012-00572389)
DYNAMIC AUTO IMAGES, OPINION
Defendant and Respondent.
Appeal from a judgment of the Superior Court of Orange County, David R.
Chafee, Judge. Reversed and remanded.
Law Office of Michael T. Welch and Michael T. Welch for Plaintiff and
Appellant.
Del Mar Law Group, JL Sean Slattery, David P. Hall and Azar M. Khazian
for Defendant and Respondent.
* * *
Nikole Deven sued her employer Dynamic Auto Images (Dynamic),
alleging she was the victim of sexual harassment in the workplace. She also asserted that
after she complained of the harassment, she was subjected to retaliatory acts including
withholding of her wages, termination of her employment, and withholding of additional
sums due to her in the wake of termination. She sought damages as well as an award of
attorney fees and costs against Dynamic. However, Deven voluntarily dismissed her
lawsuit, and Dynamic thereafter moved for an award of attorney fees pursuant to Labor
Code section 218.5 (all further undesignated references are to this code), arguing Deven’s
lawsuit qualified as an action for unpaid wages on which it had prevailed. The trial court
granted that motion but awarded a reduced amount of fees, reasoning that only three of
Deven’s six causes of action – breach of contract, retaliation, and wrongful termination in
violation of public policy – were grounded on the alleged nonpayment of wages. That
fee award was later incorporated into the judgment.
On appeal, Deven challenges the award. She does not contest the propriety
of the court’s decision to apportion the fees among her causes of action, but argues the
resulting award was overly generous because only one of her six causes of action, not
three, could be properly viewed as actions brought for nonpayment of wages.
We reverse. Although the trial court acted within its discretion in deciding
to apportion the fees among the covered and non-covered claims, it nonetheless erred by
hewing too closely to the repetitive allegations and overlapping causes of action
identified in Deven’s complaint while doing so, resulting in an award of fees based
explicitly on causes of action which do not support such an award. On remand, the court
must award only those fees necessary to defend against Deven’s claims for wages, rather
than by simply dividing the causes of action asserted by Deven.
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FACTS
Deven’s complaint alleges, as facts common to all causes of action, that she
was employed by Dynamic with her principal responsibilities including sales of products
and services. During the course of her employment, she was subjected to an “escalating
pattern of sexually-laden statements and conduct by her manager” (who is also
Dynamic’s owner.) She resisted and objected to these statements and conduct, despite
her fear of adverse employment consequences. Thereafter, consistent with her fear, she
was subjected to retaliatory and adverse actions by Dynamic, including “denial and
refusal to pay compensation due and owing” and “termination of [her] employment.”
Based on those basic facts, her complaint set forth causes of action styled
(1) “sexual harassment,” (2) “sex discrimination,” (3) “retaliation,” (4) “failure to prevent
harassment,” (5) breach of contract, and (6) “wrongful termination in violation of public
policy.” (Initial capitalization omitted.) In her prayer, Deven sought an award of
attorney fees, as well as costs.
Shortly after the complaint was filed, Dynamic served Deven with written
discovery, and she failed to respond in a timely fashion. As a consequence, Dynamic
served and filed a motion to compel her to respond to the discovery and sought an award
of monetary sanctions against her. Deven also failed to respond to that motion. Instead,
she unilaterally abandoned the action by filing a voluntary dismissal of the complaint two
days before to the scheduled hearing.
Following the dismissal, Dynamic filed a motion requesting an award of
$14,442 in attorney fees in its favor, on the basis it qualified as the prevailing party on a
claim for wages under section 218.5. The trial court granted the motion, but concluded
that only three of Deven’s six causes of action qualified as “action[s] brought for the
nonpayment of wages.” (Ibid.) Specifically, the court found that “the 3rd cause of action
for retaliation, the 5th cause of action for breach of contract, and half the 6th cause of
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action for violation of public policy” qualified as actions for nonpayment of wages.
Consequently, the court ordered Deven to pay 42 percent of the fees claimed by Dynamic
or $6,065.64.
DISCUSSION
1. The Record on Appeal is Sufficient.
We first address Dynamic’s contention the judgment should be affirmed
simply because Deven failed to provide us with an adequate record on appeal. Dynamic
argues that in order to assess whether the trial court’s discretionary award of fees was
correct, we must consider “all of the circumstances” surrounding its order (quoting
Loomis v. Loomis (1960) 181 Cal. App. 2d 345, 348), and that we cannot do that here
without considering the declaration and notice of lodgment it filed with the trial court in
support of its motion for fees – neither of which was included in the record Deven
provided to us.
We are unpersuaded by the contention. While it is true that a judgment on
appeal is presumed correct, not every circumstance surrounding rendition of the judgment
is automatically relevant in evaluating any assertion that it is erroneous. The only
circumstances we are concerned with are those that actually bear upon the particular
assertion advanced by the appellant.
In this appeal, Deven makes a very narrow assertion, i.e., that the court
committed error in determining whether the causes of action alleged in her complaint
legally qualify as “action[s] brought for the nonpayment of wages” under section 218.5.
Such an inquiry would not, as a general rule, involve consideration of extrinsic evidence,
and there is no suggestion in Dynamic’s fee motion (which is included in our record) that
it urged the court below to do so.
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Significantly, Deven does not challenge the sufficiency of the evidence to
support the amount of fees awarded to Dynamic in its motion. Her argument is a legal,
not a factual one. Because there is no indication that the evidence relied upon by
Dynamic below would be relevant in evaluating Deven’s contention on appeal, we cannot
conclude she was obligated to include it in her appellate record.
2. FEHA and Common Law Tort Causes of Action Are Not Actions for Nonpayment of
Wages.
The trial court’s fee award was based on section 218.5, which is part of a
statutory scheme governing the obligation of employers to promptly pay wages. (§ 200
et seq.) The statute provides in pertinent part that “[i]n 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 shall not apply to an action brought by the Labor Commissioner.”
(§ 218.5.) Effective January 1, 2014, any party seeking attorney fees under section 218.5
who is not an employee may recover fees only if the trial court “finds the employee
brought the court action in bad faith.” (§ 218.5, subd. (a).)
Based on the allegations of Deven’s complaint, the trial court determined
that three of her six causes of action – breach of contract, retaliation, and wrongful
termination in violation of public policy – qualified as actions brought for the
nonpayment of wages. As the trial court noted, Deven’s cause of action for retaliation
explicitly describes Dynamic’s retaliatory conduct as including not only its termination of
her employment, but also its denial of her “earned compensation.” (Italics added.)
Deven’s cause of action for wrongful termination in violation of public policy not only
incorporates her entire retaliation cause of action by reference, but then explicitly
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realleges that Dynamic’s alleged violation of the public policy requiring it to pay her
earned wages is part of the new cause of action.
And since Deven herself had included a request for attorney fees in her
complaint, the court determined Dynamic was entitled to an award of fees under section
218.5, as the prevailing party on those covered causes of action.
On appeal, Deven does not challenge the trial court’s basic interpretation of
the fee statute, nor does she quibble with its decision to apportion the fees among her
causes of action. She likewise accepts the court’s determination that her breach of
contract cause of action qualifies as an action for nonpayment of wages under the statute.
But what Deven does challenge is the court’s specific determination that
her causes of action for retaliation and wrongful termination in violation of public policy
also qualified as actions for nonpayment of wages, and thus as appropriate bases for a fee
award. Her theory is that because each of these causes of action constitutes a “distinct
tort claim [based] on a completely different policy rationale” than the one underlying a
claim for nonpayment of wages, they cannot also be construed as alleging a claim which
entitles the employer to recover fees under section 218.5. We agree.
An “action brought for the nonpayment of wages” “is an action
brought on account of nonpayment of wages. The words ‘nonpayment of wages’ in
section 218.5 refer to an alleged legal violation, not a desired remedy.” (Kirby v. Immoos
Fire Protection, Inc. (2012) 53 Cal. 4th 1244, 1256, original italics.) Nonpayment of
wages must be the gravamen of the cause of action to qualify for an attorney fee award
under section 218.5. (Ibid.) For example, in Kirby, the Supreme Court concluded a
claim under section 226.7 for failure to provide meal and rest breaks was not a claim for
nonpayment of wages because the gravamen of the claim was the failure to provide the
statutorily-mandated breaks even though the remedy was an additional hour of wages for
each violation. (Ibid.)
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Here, the gravamen of Deven’s retaliation claim was that Dynamic
unlawfully retaliated against her for engaging in protected activities—complaining about
Dynamic’s sexual harassment and discrimination—even though the retaliation took the
form of nonpayment of wages and termination of her employment. Similarly, the
gravamen of Deven’s wrongful termination in violation of public policy claim was that
Dynamic terminated her employment because Deven engaged in protected activity.
(4 Wilcox, Cal. Employment Law (2012) Liability for Wrongful Termination and
Discipline, § 60.04[1][a], p. 60-39 [essential elements of wrongful termination in
violation of public policy claim include adverse employment action based on employee
engaging in conduct protected by public policy].) The only one of Deven’s claims on
which the gravamen was nonpayment of wages was the claim for breach of contract and
that is the only claim that supports an attorney fee award under section 218.5. Although
the trial court has broad discretion to apportion fees between covered and non-covered
claims in cases where an award is proper (Carver v. Chevron U.S.A., Inc. (2004) 119
Cal. App. 4th 498, 505), it abuses its discretion when the apportionment is based on an
error of law (Costco Wholesale Corp. v. Superior Court (2009) 47 Cal. 4th 725 [“[a]n
abuse of discretion is shown when the trial court applies the wrong legal standard”]).
That is what occurred here.
Initially, we note that Deven has only one right to recover wages she
actually earned, but were not paid to her. That claim is contractual in nature, and if she
were able to prove unpaid wages were owed to her, she would be entitled to recover them
without regard to Dynamic’s alleged motive for the nonpayment. Conversely, if those
wages were not owed to her as a matter of contract law, they would also not be
recoverable as part of a tort cause of action for retaliation or wrongful termination. Thus,
Deven’s reliance on that nonpayment as part of her separate claims for retaliation and
wrongful termination did not actually expand the scope of the wage claim.
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More significantly, Deven’s causes of action for retaliation and for
wrongful termination in violation of public policy both arise under the California Fair
Employment and Housing Act (FEHA) (Gov. Code, § 12900, et seq.) FEHA makes it
illegal for an employer “to discriminate against [an employee] in compensation or in
terms, conditions, or privileges of employment,” on account of the employee’s “race,
religious creed, color, national origin, ancestry, physical disability, mental disability,
medical condition, genetic information, marital status, sex, gender, gender identity,
gender expression, age, or sexual orientation,” or “to refuse to hire or employ the person
or to refuse to select the person for a training program leading to employment, or to bar
or to discharge the person from employment or from a training program leading to
employment [on any of those grounds.]” (Gov. Code, § 12940, subd. (a).)
The FEHA has its own statute governing awards of attorney fees for claims
falling within it (Gov. Code, § 12965, subd. (b)), and our record reflects no request for
such fees was made by Dynamic. Thus, the trial court erred by purporting to award fees
to Dynamic based directly on Deven’s FEHA retaliation cause of action. We must
consequently reverse the order and remand the case to the trial court for reconsideration
of the award
Having said that, however, we do not mean to imply that on remand the
trial court would be restricted to awarding only one-sixth of the fees claimed by Dynamic
– as Deven claims – merely because Deven organized her allegations into what she
characterized as six separate causes of action. It is the general rule that “[w]hen a cause
of action for which attorney fees are provided by statute is joined with other causes of
action for which attorney fees are not permitted, the prevailing party may recover only on
the statutory cause of action.” (Akins v. Enterprise Rent-A-Car Co. (2000)
79 Cal. App. 4th 1127, 1133.) But an exception exists for fees “incurred for representation
of an issue common to both a cause of action for which fees are permitted and one for
which they are not.” (Ibid.) In that situation, an allocation need not be made and all fees
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“incurred on the common issues qualify for an award.” (Ibid.) An exception to the
general rule also exists when “issues are so interrelated that it would have been
impossible to separate them into claims for which attorney fees are properly awarded and
claims for which they are not.” (Ibid.)
Accordingly, Dynamic may recover its fees for all work related to issues
presented by Deven’s breach of contract claim regardless of whether that work also
related to issues presented by her FEHA or other tort causes of action, but Dynamic may
not recover its fees for any work related to issues presented solely by those other causes
of action. Stated another way, Dynamic may recover only those fees necessary to defend
against Deven’s claim for unpaid wages. The precise allocation of fees among the
various issues presented is vested in the trial court’s sound discretion and it will be
reversed only for an abuse of that discretion provided the court applies the foregoing
standards. (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal. App. 4th 1582, 1604.)
DISPOSITION
The judgment is reversed and the case is remanded to the trial court with
directions to reconsider the fee award. The parties are to bear their own costs on appeal.
RYLAARSDAM, ACTING P. J.
WE CONCUR:
ARONSON, J.
IKOLA, J.
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