Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a postjudgment order of the Superior Court of Los Angeles County No. BC254143. Wendell J. Mortimer, Jr., Judge.
Kumetz & Glick, Fred Kumetz, Stephen Glick; Law Offices of Ian Herzog, Ian Herzog; Daniels, Fine, Israel & Schonbuch, Paul R. Fine, Scott A. Brooks and Craig S. Momita for Plaintiff and Appellant.
Thelen Reid & Priest, Thomas E. Hill and Robert Spagat for Defendant and Respondent.
DOI TODD, J.
Plaintiff and appellant Eddy Korkiat Prachasaisoradej asks this court to consider the issues remaining on appeal following the California Supreme Court’s decision in Prachasaisoradej v. Ralphs Grocery Co., Inc. (2007) 42 Cal.4th 217 (Ralphs Grocery). In an opinion filed on September 8, 2004, this court reversed an order sustaining a demurrer without leave to amend and award of attorney fees in favor of defendant and respondent Ralphs Grocery Company, Inc. (Ralphs). Thereafter, in Ralphs Grocery the Supreme Court reversed, ruling that appellant failed to state a violation of the Labor Code or any other statutory provision. (Ralphs Grocery, supra, at p. 244.) Due to the limited nature of the issue on review, however, the Supreme Court did not address the propriety of the attorney fee award. We granted appellant’s request to recall the remittitur for the purpose of addressing the challenges to the attorney fee award that appellant raised in the original appeal.
We affirm. The trial court properly exercised its discretion in awarding $275,000 in attorney fees to Ralphs.
FACTUAL AND PROCEDURAL BACKGROUND
The relevant facts and procedural background are set forth in Ralphs Grocery, supra, 42 Cal.4th at pages 224 through 226. Briefly, appellant was employed by Ralphs as a produce manager and in July 2001 filed original and first amended complaints against Ralphs. He sought to bring a class action alleging violation of the wage-protection rules in Labor Code sections 221, 400 through 410 and 3751, and Business and Professions Code section 17200 on the basis of Ralphs’s bonus plan that calculated supplementary compensation using a formula that deducted expenses and losses which appellant alleged should be borne by Ralphs.
Ralphs removed the case to federal court on the ground that section 301 of the Labor Management Relations Act (LMRA) (29 U.S.C. § 185(a)) preempted appellant’s state law claims because a collective bargaining agreement (CBA) governed his compensation. The district court remanded the case, finding that appellant’s claims arose under state law and did not require interpretation of or reference to the CBA. After remand, appellant filed a second amended complaint alleging, as before, that the incentive compensation payments were calculated on the basis of the stores’ net earnings and wrongfully deducted employer expenses from employee wages. Appellant sought injunctive relief, lost wages according to proof on behalf of the class, penalties, damages, and fees and costs.
Ralphs demurred to the second amended complaint on the grounds that LMRA preempted the claims and that appellant failed to allege state law violations in any event. The trial court sustained the demurrer without leave to amend on the ground of preemption and issued a separate order awarding Ralphs attorney fees as costs pursuant to Labor Code section 218.5. We reversed, holding that appellant’s claims were not preempted because they arose under independent state law provisions and, relying on Ralphs Grocery Co. v. Superior Court (2003) 112 Cal.App.4th 1090, that appellant stated a viable claim under state law. In view of this disposition, we also reversed the postjudgment order awarding Ralphs attorney fees and costs.
The Supreme Court granted Ralphs’s petition for review, expressly “limiting the issues to the following: Does an employee bonus plan based on a profit figure that is reduced by a store’s expenses, including the cost of workers’ compensation insurance and cash and inventory losses, violate (a) Business and Professions Code section 17200, (b) Labor Code sections 221, 400 through 410, or 3751, or (c) Regulation 11070?” (Ralphs Grocery, supra, 42 Cal.4th at p. 226.) Answering that limited question, the court stated: “[W]e hold that Ralphs’s profit-based supplementary ICP [incentive compensation plan], designed to reward employees beyond their normal pay for their collective contribution to store profits, did not violate the wage protection policies of Labor Code sections 221, 400 through 410, or 3751, or Regulation 11070, insofar as the Plan included store expenses such as workers’ compensation costs, cash and merchandise shortages, breakage, and third party tort claims in the profit calculation. The derivative claim of liability under Business and Professions Code section 17200 thus also fails. Accordingly, we will reverse the decision of the Court of Appeal, which reversed the judgment of dismissal entered after the trial court sustained Ralphs’s demurrer to plaintiff’s complaint without leave to amend. We will also disapprove Ralphs Grocery, supra, 112 Cal.App.4th 1090, to the extent it reaches contrary conclusions.” (Id. at p. 244, fn. omitted.)
The Supreme Court issued its remittitur on August 23, 2007 and this court issued its own remittitur on October 10, 2007. Thereafter, appellant moved to recall the remittitur on the ground that his appeal of the attorney fee award had never been considered. On November 27, 2007, we issued an order recalling the remittitur. We now turn to the issues remaining from appellant’s original appeal.
DISCUSSION
I. Remaining Issues and Standard of Review.
Neither our opinion nor the Supreme Court’s opinion in this matter directly addressed appellant’s two arguments on appeal that challenged the attorney fee award. But our finding of no preemption necessarily disposed of appellant’s first argument that recovery of attorney fees under the Labor Code would be unwarranted if the court held his claims were preempted. The Supreme Court declined to review the portion of our opinion concluding that appellant’s claims arose under independent state law provisions. (Ralphs Grocery, supra, 42 Cal.4th at p. 226; cf. Albertson v. Raboff (1956) 46 Cal.2d 375, 382 [unappealed portions of judgment deemed final].)
Because appellant’s claims were premised on Labor Code violations, an award of attorney fees was mandatory. (Lab. Code, § 218.5 [“In any action brought for the nonpayment of wages . . . 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”]; see also Jones v. Catholic Healthcare West (2007) 147 Cal.App.4th 300, 307 [“Courts routinely construe the word ‘may’ as permissive and words like ‘shall’ or ‘must’ as mandatory”].) Appellant does not dispute that Ralphs properly requested attorney fees and that it was ultimately the prevailing party.
Accordingly, the only issue remaining on appeal is appellant’s second argument challenging the reasonableness of the fee award amount. We review for abuse of discretion a trial court’s determination of the amount of an award of statutory attorney fees. (E.g., PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095; Serrano v. Priest (1977) 20 Cal.3d 25, 49; Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447 (Vo).) “The ‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.’” (Serrano v. Priest, supra, at p. 49; accord, Finney v. Gomez (2003) 111 Cal.App.4th 527, 545 [“The trial court’s decision will only be disturbed when there is no substantial evidence to support the trial court’s findings or when there has been a miscarriage of justice”].)
II. The Attorney Fees Award was Reasonable.
A. Ralphs’s Motion to Include Attorney Fees as Costs.
After the trial court sustained Ralphs’s demurrer without leave to amend, Ralphs moved pursuant to Labor Code section 218.5 to include an award of attorney fees in the amount of $320,325.52 as an element of costs. The amount requested was ten percent below the amount of fees actually incurred. Ralphs supported the motion with declarations from its outside counsel Robert Spagat and its in-house attorney Matthew Kane, as well as declarations from attorneys in other Los Angeles firms averring that their billing rates were comparable to those charged by Ralphs’s counsel. It also submitted billing records that contained a breakdown of hours billed by date, attorney(s), time spent and subject matter. Finally, Ralphs offered the declaration of James Schratz, an attorney who specialized in conducting legal audits to determine whether attorney fees were reasonable and necessary. He opined that the hourly rates charged by Ralphs’s counsel were within reasonable market rates, that the case raised numerous complex issues requiring substantial research, that staffing was reasonable and that there was nothing to suggest the requested fee was unreasonable.
Appellant opposed the motion on two grounds: (1) Recovery of fees was unwarranted given the trial court’s ruling that his state law claims were preempted; and (2) the amount of fees requested was excessive. In support of his opposition, he submitted the declarations of his attorneys who questioned several entries on Ralphs’s attorneys’ billing records, such as the time spent on telephone conferences and on documents filed with the court.
Following a hearing on June 6, 2003, the trial court issued a minute order granting the motion, ruling that the issuance of such an award was mandatory under Labor Code section 218.5, but exercising its discretion to reduce the requested award by approximately 20 percent to $275,000.
B. The Trial Court Properly Exercised Its Discretion in Awarding Ralphs Attorney Fees.
In assessing the reasonableness of an attorney fee request, the trial court begins its analysis by determining the hours spent by counsel on the litigation and a reasonable hourly fee. After considering a variety of other factors—including the novelty and difficulty of the issues presented—the trial court may then augment or reduce the fee. (Serrano v. Priest, supra, 20 Cal.3d at pp. 48–49; Vo, supra, 79 Cal.App.4th at pp. 445–446.) In the end, “a party who qualifies for a fee should recover for all hours reasonably spent unless special circumstances would render an award unjust.” (Vo, supra, at p. 446.)
At the hearing on the attorney fee award, the trial court articulated the basis for its ruling: “Well, as to the overall amount, their bills totaled $356,000, and I looked through them rather carefully, and they seem to be very well documented to me. And even though this was the demurrer stage, a lot went on. The court’s file is very thick, and I’m sure counsel’s files are much thicker. So I did cut the fee somewhat, but I think I’d be well justified in awarding considerably more.” These comments indicate that the trial court understood the full extent of its discretion. The trial court considered the amount of time spent and the complexity and volume of issues that the parties addressed. Further, despite acknowledging that Ralphs’s entire fee request was justified, it exercised its discretion to reduce the over $320,000 requested to $275,000. We see nothing in the record that renders the trial court’s attorney fee award “‘clearly wrong.’” (Serrano v. Priest, supra, 20 Cal.3d at p. 49.)
We find no merit to appellant’s challenges to the attorney fee award. Appellant contends that the trial court abused its discretion in three primary respects. First, appellant contends that the requested fees were excessive because they were unreasonable. He argues that because appellant’s attorneys were experts in their field they should not have had to spend significant time conducting research on labor law issues. But Ralphs’s expert, Mr. Schratz, opined to the contrary that the matter involved both significant factual issues and complex federal and state law issues requiring substantial amounts of research. Appellant presented no evidence to contradict Mr. Schratz’s conclusions.
We likewise reject appellant’s argument that the fee award was unreasonable when compared to fee requests in other cases where the litigation had progressed well beyond the pleading stage. (See, e.g., Vo, supra, 79 Cal.App.4th at pp. 444–445 [$470,000 fee award reasonable following a three-week trial].) The question before us is not whether the fee request was reasonable when compared to other cases, but rather, whether the trial court properly exercised its discretion when confronted with detailed billing records showing the time counsel spent during the one and one-half years the case had been litigated. As aptly noted in Children’s Hospital & Medical Center v. Bontá (2002) 97 Cal.App.4th 740, 777, “[w]ith respect to the amount of fees awarded, there is no question our review must be highly deferential to the views of the trial court. [Citation.]” That the circumstances in other cases may have supported higher or lower attorney fee awards than here fails to demonstrate an abuse of discretion.
Second, appellant contends that the requested fees were excessive because they were unnecessary. Pointing to several specific billing items, such as work on issues that were ultimately found to be irrelevant or time spent on unfiled pleadings and motions, he argues that Ralphs’s counsel spent significant blocks of time unnecessarily. But again, the trial court received evidence to the contrary. The declaration submitted by Ralphs’s primary attorney on the case set forth in great detail the tasks he and other attorneys performed, the reasons for each task and the time spent on each task. Moreover, Mr. Schratz’s examination of Ralphs’s billing records did not reveal that counsel had engaged in unnecessary tasks. The record demonstrated that the trial court exercised its discretion in considering whether certain tasks were necessary. For example, addressing appellant’s contention that fees incurred for removal to federal court were unnecessary, the trial court stated: “You talk about their removal to federal court. It wasn’t successful in the long run, but both sides took it seriously, and both sides spent a lot of time briefing that issue.” As courts have repeatedly stated: “The determination of what constitutes the actual and reasonable attorney fees are committed to the sound discretion of the trial court. An appellate court will interfere with that determination only where there has been a manifest abuse of discretion.” (Fed-Mart Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 228.) We find no abuse of discretion here.
Finally, appellant contends that the requested fees were excessive because there should have been an apportionment of fees between his Labor Code claims and his claim under Business and Professions Code section 17200 (section 17200). But appellant’s section 17200 claim was premised on the alleged Labor Code violations. “When 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. However, the joinder of causes of action should not dilute the right to attorney fees. Such fees need not be apportioned when 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. All expenses incurred on the common issues qualify for an award.” (Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133; accord, Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129–130 [“Attorney’s fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed”].)
Here, the trial court properly exercised its discretion in declining to apportion attorney fees between appellant’s Labor Code claims and the section 17200 claim. (See Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111 [apportionment of a fee award between causes of action is within the trial court’s discretion].) Appellant’s operative second amended complaint alleged that Ralphs’s unlawful earnings bonuses calculations and deductions constituted violations of Labor Code sections 221, 400 through 410 and 3751 and section 17200. According to appellant’s allegations, his section 17200 claim was merely derivative of his Labor Code claims. (See Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 [“Section 17200 ‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices”].) Because Ralphs’s efforts to defeat appellant’s causes of action turned on a common issue—demonstrating that its compensation plan did not involve a prohibited set-off or deduction—appellant has not demonstrated the trial court’s failure to apportion the fees was an abuse of discretion.
The Supreme Court later confirmed the trial court’s assessment. It outlined the singular set of facts—whether Ralphs’s “employee bonus plan based on a profit figure that is reduced by a store’s expenses, including the cost of workers’ compensation insurance and cash and inventory losses”—that potentially violated both the relevant Labor Code provisions and section 17200. (Ralphs Grocery, supra, 42 Cal.4th at p. 226.) Thereafter, it concluded that because Ralphs’s profit-based compensation plan did not violate the wage protection policies of the Labor Code, “[t]he derivative claim of liability under Business and Professions Code section 17200 thus also fails.” (Ralphs Grocery, supra, at p. 244.)
Absent any showing that the trial court abused its discretion in awarding Ralphs attorney fees, we find no basis to disturb the award.
DISPOSITION
The order awarding Ralphs $275,000 in attorney fees is affirmed. Ralphs is awarded its costs on appeal.
We concur: BOREN, P. J., CHAVEZ J.