Attorney Fees Aren’t Costs in Appellate Court

Friday, January 4, 2019

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Attorney Fees Aren’t Costs in Appellate Court—Court of Appeal

Justice Collins: Determination in Opinion That Each Side to Bear Its Own Costs Did Not Strip Superior Court Of Jurisdiction to Order Losing Party to Pay Value of Services of Opponent’s Appellate Counsel

By a MetNews Staff Writer

An Orange County lawyer has failed to persuade the Court of Appeal for this district that when it affirmed a judgment against him, providing in its 2017 opinion that both sides were “to bear their own costs of appeal,” it was signaling that the trial court was not to award attorney fees to his adversary’s appellate lawyer.

Justice Audrey Collins wrote the opinion for Div. Four, filed Dec. 7 and certified for publication on Wednesday. It affirms Los Angeles Superior Court Judge Edward J. Moreton Jr.’s Oct. 17, 2017 order that Thomas E. Beck pay $57,420 to Anthony Stratton, a former employee of his, to cover fees earned by attorney David M. Balter in opposing the earlier appeal.

Balter, of San Francisco, is an attorney for the California Department of Industrial Relations’s Division of Labor Standards Enforcement. Beck is not to be confused with Thomas Patrick Beck, who retired in 2012 as a partner in Thon Beck Vanni Callahan & Powell in Pasadena, of which he was a founder 30 years before, and is now a member of the Arcadia City Council.

Collins commented at the outset of her opinion:

“This case began as a dispute over approximately $300 in unpaid wages. It has since transmogrified into a dispute concerning attorney fees totaling nearly 200 times that amount and is here now for the second time.”

$303.50 Claim

Stratton worked for Beck for about two months in 2013 before quitting. Beck’s payroll service paid Stratton $771.45 in ordinary wages due, rather than the $1,075 he had claimed and which Beck had authorized.

The former employee made a claim to the Division of Labor Standards Enforcement for $303.50; following an administrative hearing, the labor commissioner awarded him the $303.50 plus $5,757.46 in liquidated damages, interest, and statutory penalties, for a total of $6,060.96; Beck appealed to the Los Angeles Superior Court.

Beck fared no better there. Judge Mark A. Borenstein found, following a bench trial, that Beck owed Stratton $6,778.85; Stratton moved for an award of attorney fees pursuant to Labor Code §98.2(c); the judge awarded $31,365 in fees; Beck appealed the fee award.

Collins’s opinion in response to that appeal was filed Feb. 14, 2017. The disposition reads:

“The judgment of the trial court is affirmed. In the interest of justice, the parties are to bear their own costs of appeal.”

Dispositional Paragraph’s Meaning

In appealing Moreton’s subsequent $57,420 award, Beck insisted that the 2017 Court of Appeal opinion’s dispositional paragraph ““implicitly denied statutory attorneys fees on appeal to Stratton’s counsel,” stripping the Los Angeles Superior Court of jurisdiction to make any such an award.

The lawyer cited Code of Civil Procedure §1033.5(a)(10) which provides that costs include “[a]ttorney’s fees, when authorized by any of the following: [¶] (A) Contract. [¶] (B) Statute. [¶] (C) Law.”

Collins responded:

“Attorney fees are recoverable as costs only where expressly authorized by contract or statute….The relevant statute here is Labor Code section 98.2(c), which provides: ‘If the party seeking review by filing an appeal to the superior court is unsuccessful in the appeal, the court shall determine the costs and reasonable attorney’s fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing the appeal. An employee is successful if the court awards an amount greater than zero.’ ”

The jurist noted that although §98.2(c), on its face, applies only to appeals to the Superior Court, a statute authorizing attorney fees at the trial court level necessarily includes such fees on appeal unless there is an express indication to the contrary.

Cites Court Rules

She also pointed to California Rules of Court, rule 8.278, entitled “Costs on appeal.” Collins wrote:

“[R]ule 8.278 enumerates ‘recoverable costs,’ which it expressly provides are the only costs that may be recovered on appeal….Those costs include filing fees, brief printing, and the cost to produce additional evidence on appeal….They do not include attorney fees….”

Collins also made note of Rule 8.278(d)(2) which provides:

“Unless the court orders otherwise, an award of costs neither includes attorney’s fees on appeal nor precludes a party from seeking them under rule 3.1702.”

That rule, Beck argued, is irrelevant because there was no award of costs. Collins said that very distinction was rejected in the 2007 Court of Appeal decision in Butler-Rupp v. Lourdeaux which, she declared, is “indistinguishable from the instant case.”

Beck Comments

Beck said yesterday the case arose from “a $300 mistake made by ADP, my payroll company,” elaborating:

“When Stratton walked off the job I phoned in his hours and thought he had been paid what he was owed. It was not until the hearing before the labor commission in Long Beach that I discovered ADP’s error but was fined with a ‘willful’ non payment penalty.”

He went on to say that when the Court of Appeal denied costs to Stratton in its 2017 decision, “I believed this also meant statutory fees because fees are costs by case law and statute,” adding:

“I pursued these appeals in the belief that the courts had erred as was supported by my research but as you can see from the opinion, each argument was shot down. In the end this tiny dispute is going to force me back to work (I retired in June 2016) to earn the money to pay the Labor Commissioner’s attorneys fees on both appeals which is now closing in on $100K.

Beck remarked that “if Stratton II serves the interests of insuring wage earners get paid for what they earned, so much the better.”

The case is Stratton v. Beck, 2018 S.O.S. 59.

The attorneys on appeal were Balter and Beck.

Moreton on April 5, 2018, made a further award of attorney fees to Stratton in the amount of $9,090, stemming from Beck’s unsuccessful motion seeking “reconsideration/clarification” of the Oct. 17, 2017 order for attorney fees.