Opinion
G031669.
11-5-2003
ROBERT GUILFORD III, Plaintiff and Appellant, v. GREENPARK HOLDINGS etc., et al., Defendants and Respondents.
Roseman & Antoni, John Antoni and Paul D. Albus, for Plaintiff and Appellant. Kohut & Kohut, Ronald J. Kohut, Laura L. Kohut and Megan L. Wagner, for Defendants and Respondents.
Robert Guilford III appeals from the denial of his post-judgment motion for an award of attorney fees as the prevailing party on a wage claim under Labor Code section 218.5. The judgment in this case was entered after defendants GreenPark Holdings, LLC, GreenPark Capital, LLC and GreenPark Group, LLC, accepted Guilfords offer to take judgment against them in the amount of $65,381, pursuant to Code of Civil Procedure section 998. Guilford argues the court erred in concluding he was not the prevailing party for purposes of an attorney fee award. We agree. The judgment entered, against all three defendants jointly, was nearly three-quarters of the entire compensatory damages sought by Guilford, leaving no room for any exercise of discretion which would support the conclusion he did not prevail. The order is reversed and the case remanded to the trial court for a determination of the amount of fees to be awarded, including fees on appeal.
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Guilford accepted an offer of employment as a financial analyst from GreenPark Group, LLP, in June of 1998. His compensation included a promised "profit participation plan" which had not yet been finalized. In November of 1999, GreenPark Holdings, LLC, granted Guilford a raise, a bonus, and outlined the terms of his participation in its "incentive bonus plan." The incentive bonus plan granted Guilford a specified number of "points" based upon the "value" of "acquisitions" made by GreenPark.
In December of 2000, GreenPark acquired property in Las Vegas, with a value of about $38,000,000. Using that number as the acquisition value under the incentive bonus plan, Guilford was apparently entitled to a bonus of approximately $ 114,000. However, GreenPark paid him only $45,000. Although the parties do not explain exactly how the "points" in the incentive bonus program translate into dollars, their dispute does not appear to involve that issue. Instead, the dispute seemed to concern the interpretation of acquisition "value" for purposes of the bonus formula, with GreenPark taking the position that the value of the acquisition referred to the amount of investment GreenPark made in the property, rather than value of the property itself.
In October of 2000, GreenPark "consummated an acquisition in connection with its GreenPark Ranch investment." The property had a value of approximately $8,000,000. Using that number as the acquisition value under the incentive bonus plan, Guilford was allegedly entitled to a bonus of $24,000. However, GreenPark paid him no bonus in connection with that property.
In May of 2001, Guilford was laid off. He made written demands for payment of the amounts he believed were owed to him under the incentive bonus plan, to no avail.
In January of 2002, Guilford filed this lawsuit, naming each of the three GreenPark entities, plus E. M. Warburg Pincus & Co. LLC, an entity alleged to be the parent company of GreenPark. Guilford alleged he was owed approximately $69,000 in unpaid bonus in connection with the Las Vegas acquisition and $24,000 in unpaid bonus in connection with the GreenPark Ranch acquisition, for a total of $93,000. His complaint is stated as four claims: (1) violation of the wage payment requirements of Labor Code sections 201, et seq, including claims for an additional one month of salary pursuant to Labor Code section 203, and attorney fees pursuant to Labor Code section 218.5; (2) breach of contract based upon the failure to pay the promised bonus; (3) fraud based upon the allegation GreenPark never intended to pay the promised bonus; and (4) quantum meruit based upon the reasonable value of the work performed.
According to GreenPark, E. M. Warburg Pincus & Co. LLC was dismissed from the lawsuit in April of 2002. The parties engaged in discovery, and on October 29, 2002, Guilford had scheduled the deposition of GreenParks former senior vice-president, Kerri Nicholi. Guilford expected Nicholi to give testimony favorable to his position, specifically on the issue of whether the phrase "acquisition value" as employed in the bonus formula had been used to refer to the amount of GreenParks investment in a property, rather than the value of the property itself.
Apparently just prior to the commencement of the deposition, Guilford served GreenPark with a written offer to compromise pursuant to Code of Civil Procedure section 998, as follows: "Plaintiff Robert Guilford hereby offers, pursuant to section 998 of the Code of Civil Procedure, to enter judgment against Defendants GreenPark Group, LLC, GreenPark Holdings, LLC and GreenPark Capital, LLC, in exchange for the sum of $65,381." According to Guilford, that amount was arrived at by calculating the exact amount he claimed was owed in bonus on the Las Vegas acquisition, and subtracting one dollar.
After commencement of the deposition, GreenParks counsel stated orally that GreenPark would accept the offer to have judgment taken against it. Although GreenParks counsel attempted to terminate the deposition in light of the acceptance, Guilford insisted on completing it. Nicholis testimony was consistent with Guilfords contention that "acquisition value" was generally used within GreenPark to refer to the purchase price of acquired property.
On November 5, 2002, the court entered judgment in favor of Guilford on his complaint, in the amount of $65,381, against all three of the GreenPark entities. On November 20, Guilford filed a memorandum of costs and a motion for an award of attorney fees as prevailing party on a wage claim. After a hearing, the court denied the motion, concluding that "[n]either party is deemed to be the prevailing party."
It is well settled that a judgment entered pursuant to Code of Civil Procedure section 998 does not foreclose the right to obtain an award of costs or attorney fees, unless the offer specifies that such an award is waived. (Rappenecker v. Sea-Land Service, Inc. (1979) 93 Cal.App.3d 256; Lanyi v. Goldblum (1986) 177 Cal.App.3d 181, 192-193, fn. omitted ["Applying contract principles, the parties failure to `expressly or by necessary implication exclude statutory fees, as an incident to the cause, means that the fees were not contemplated in settlement and therefore may be awarded."]; Pazderka v. Caballeros Dimas Alang, Inc. (1998) 62 Cal.App.4th 658, 671; Ritzenthaler v. Fireside Thrift Co. (2001) 93 Cal.App.4th 986. GreenParks bold proclamation that "there is not a single published decision in California awarding an award of statutory attorneys fees based upon the acceptance of a CCP § 998 Offer" is simply wrong.
In this case, the claim for fees was based upon Labor Code section 218.5, which 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 attorneys fees and costs to the prevailing party if any party to the action requests attorneys fees and costs upon the initiation of the action."
"Wages" are defined in the Labor Code to include "all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation." (Lab. Code, § 200, subd. (a).)
Labor Code section 218.5, however, does not provide any definition of "prevailing party." Thus, it would seem that we should turn to the general provisions for award of costs and fees, found in Code of Civil Procedure section 1032, subdivision (a)(4). It provides: "`Prevailing party includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the `prevailing party shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034." (Italics added.)
GreenPark, however, contends the definition of prevailing party in Code of Civil Procedure section 1032 does not apply to statutory fee provisions which specify that fees "shall" be awarded to the prevailing party, but without specifying what it means to "prevail." GreenPark asserts that in such cases, the court has discretion to determine which party, if any, prevailed. However, none of the cases GreenPark relies upon for that proposition support the conclusion the court had discretion to deny Guilford prevailing status in this case.
In ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, the court considered whether a defendant who prevailed in striking some, but not all, of plaintiffs causes of action as a SLAPP suit, was entitled to an attorney fee award pursuant to the fee provision contained in the SLAPP statute. The court concluded, as a matter of law, that it was entitled to a fee award, based upon an analysis of the policy and purposes behind that statute. However, the court had no occasion to consider the application of the "prevailing party" definition in Code of Civil Procedure section 1032, because the SLAPP motion did not conclude the litigation.
"SLAPP" refers to Strategic Lawsuit Against Public Participation. (Code Civ. Proc., § 425.16.)
Similarly, in cases involving awards of attorney fees under Civil Code section 1717, the determination of the "prevailing party" is not controlled by Code of Civil Procedure section 1032, because the determinative issue under Civil Code section 1717 is which party prevailed on the contract, not in the litigation as a whole. Thus, in deciding whether there is a prevailing party, the court must "compare the relief awarded on the contract claim or claims with the parties demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources." (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.)
In Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, the plaintiff voluntarily dismissed the complaint, without prejudice, pursuant to a settlement agreement reached with third parties. Although the defendant argued that as a party in whose favor a dismissal had been entered (Code Civ. Proc., § 1032, subd. (a)(4)), he was entitled to an award of statutory fees as provided in Civil Code section 1354, the appellate court rejected the contention and cautioned against "adopt[ing] a rigid interpretation of the term `prevailing party . . . ." (Id. at p. 1574.) Instead, the court urged trial courts to "analyze[] which party had prevailed on a practical level." (Ibid.) We would agree that a voluntary dismissal of a complaint, without prejudice, is difficult to characterize as a "win" for the defendant, given that plaintiff could, in theory, reinstitute the same claim at a later date. Other cases relied upon by GreenPark, including Gilbert v. National Enquirer, Inc. (1997) 55 Cal.App.4th 1273 and Galan v. Wolfriver Holding Corp. (2000) 80 Cal.App.4th 1124, also involve dismissals without prejudice.
This case, by contrast, involves a money judgment entered in favor of plaintiff, for a significant sum of money. We have difficulty seeing any ambiguity here in terms of who prevailed. GreenPark, however, has several arguments as to why Guilford did not actually prevail.
First, GreenPark contends the judgment represents only a nuisance amount, and does not reflect any merit in Guilfords claims. The most significant problem with that contention is the fact that Guilfords "nuisance" settlement represented nearly three-quarters of the compensatory damages he sought. If that were the going "nuisance" rate, what would it take to settle a case with arguable merit? GreenParks "nuisance value" contention is based in part on the fact that the settlement amount was less than the attorney fees already invested by Guilford in the lawsuit at the time of settlement, and was thus "less than required to fully compensate [Guilfords ] lawyers for their time." But that only begs the question by assuming the compromise judgment encompassed the statutory fee claim. As the cases make clear, it does not. "Section 998 only settles those issues which would have been resolved at the trial. [Citation.] Costs and attorneys fees are authorized solely by statute, and are incident of the judgment unless expressly part of the judgment. [Citation.]" (Pazderka v. Caballeros Dimas Alang Inc., supra, 62 Cal.App.4th at p. 671.) Because the Code of Civil Procedure section 998 judgment did not encompass the right to fees invested in prosecuting the case, the amount of that judgment represented a substantial, rather than a negligible, compensation for Guilfords wage claim.
In popular parlance, the phrase "begs the question" has been hijacked to mean "invites the inquiry." Its original meaning, in the terms of formal logic, was the fallacy of offering an argument which assured the very thing it was attempting to prove.
GreenPark also contends the trial court could properly determine that Guilford had not prevailed because the judgment amount was equivalent to Guilford "`forego[ing] his bonus claim arising from the GreenPark Ranch transaction and was `[one dollar] less than the bonus owed by GreenPark for the Las Vegas Property." But even if we looked at it that way, it amounts to a win for Guilford on the substantially larger Las Vegas transaction, and a win for GreenPark on the smaller claim. No reasonable litigant, given the choice between winning on the big claim or the small one, would pick the small one. Thus, even if we construed the judgment in the "plaintiff one, defendant one" manner suggested by GreenPark, we certainly could not call it a "tie."
We do not consider the one-dollar difference between the judgment amount and the amount that Guilford calculated to be owed on the Las Vegas transaction to be significant.
GreenPark next contends it is impossible to tell exactly which GreenPark entity Guilford prevailed against, and on exactly which of his causes of action. We disagree. The "who" issue is easy, because the judgment clearly provides that Guilford prevailed against all three GreenPark entities. Having agreed to the entry of that judgment against them, those entities cannot now argue the judgment does not mean what it says. Similarly, it is too late for GreenPark to argue that Guilford could never have proved that each of them was liable for his wages as the employer. A defendants stipulation to judgment obviates the need for plaintiff to prove the allegations of his claim.
In any event, we note that the attachments to Guilfords complaint provide some support for his contention that the roles played by the various GreenPark entities in his employment was somewhat blurred. The June 2, 1998 letter, offering him employment, including "profit participation," came from GreenPark Group, LLC. The November 29, 1999 letter, confirming Guilfords raise and specifying the terms of the incentive bonus plan, came from GreenPark Holdings, LLC, and identified the bonus plan as being that of GreenPark Holdings, LLC.
Similarly, there can be no confusion about which cause of action Guilford prevailed on. In Crowley v. Katleman (1994) 8 Cal.4th 666, 681-682, the Supreme Court explained "The primary right theory is a theory of code pleading that has long been followed in California. It provides that a `cause of action is comprised of a `primary right of the plaintiff, a corresponding `primary duty of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.] The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. [Citation.] . . . [¶] As far as its content is concerned, the primary right is simply the plaintiffs right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: `Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief. [Citation.]"
In this case, Guilfords claims were all based upon a single key allegation, i.e., that GreenPark failed to pay him the wages he was owed. No matter which legal theory was relied upon to justify recovery, it amounts to the same wrong. Even Guilfords fraud claim was grounded on the failure to pay wages, with the additional contention that GreenPark never intended to pay the promised wages. Thus, no matter which legal theory pleaded by Guilford is deemed to be the winner, this was clearly an "action brought for the nonpayment of wages." (Lab. Code, § 218.5.)
Finally, GreenPark relies upon this courts recent decision in Burch v. Childrens Hospital of Orange County Thrift Stores, Inc. (2003) 109 Cal.App.4th 537, for the proposition that Guilfords Code of Civil Procedure section 998 offer was invalid when made, because it failed to differentiate among the GreenPark defendants. However, the issue in Burch was whether a Code of Civil Procedure section 998 offer which was rejected by defendants was valid for purposes of triggering the statutory penalties which come into play if plaintiff later obtains a better result at trial. Our analysis of that issue is immaterial to this case, because here the offer was accepted and the agreed upon judgment was entered. GreenPark has stated no basis for, nor have they sought, a vacation of that judgment.
Guilford has also requested that we determine the amount of fees to be awarded to him under Labor Code section 218.5. That is a matter more appropriately addressed to the trial court in the first instance, and we consequently remand this case to the trial court for that purpose.
The order is reversed, and the case remanded to the trial court for a determination of the amount of fees to be awarded, including fees on appeal. Guilford is to recover his costs on appeal.
WE CONCUR: OLEARY, J. and FYBEL, J.