However, Lower Court Correctly Determined Plaintiff Was Not Prevailing Party.
Labor Code section 218.5 is a prevailing party fee-shifting provision for claims involving unpaid wages. That section was central to the next case, specifically with the question funneling down to who prevailed.
In Lutz v. Sortwell, Case No. D055792 (4th Dist., Div. 1 July 29, 2011) (unpublished), cross-complainant brought a breach of partnership agreement and unpaid wages claims against cross-defendants, eventually winning $13,800 in “sweat equity” damages on the breach claim and $90 in unpaid wages. The lower court denied both sides’ requests for fees, with cross-complainant seeking $46,000 in fees under Labor Code section 218.5 and the other side seeking $240,000 in fees based on Civil Code section 1717 due to a provision in a resident manager employment agreement (on a claim adjudged against cross-complainant). Importantly, from a procedural standpoint, plaintiff dismissed the Labor Code claim and was awarded damages on partnership agreement breach claim, not pressing Civil Code section 1717 as a basis for a fee award.
The appellate court affirmed.
The Labor Code 218.5 claim dismissal was not found dispositive, because the breach of partnership agreement claim did involve a claim for nonpayment of wages. However, that did not end the inquiry. The appellate court observed that a pragmatic test guides the “prevailing party” determination. Because cross-complainant sought $32,000 in the trial court and $83,000 under an unsuccessful new trial motion (but got much less–under $14,000), and the cross-defendants did not completely defense the case, the lower court was right to conclude no one prevailed. So, in the end, everyone ended bearing their own fees in this one.