Vacation Pay Award Totaled $28,500, With Prevailing Plaintiff Winning Subsequent Fees Of $495,549.75 And Costs Of $84,035.40.
Curran v. Schools of the Sacred Heart-San Francisco, Case Nos. A142615/A143646 (1st Dist., Div. 2 June 5, 2018) (unpublished) was a case where plaintiff, dean of students at defendant, did not have her contract extended after 37 years with the school. She then sued based on FEHA (age/gender discrimination and retaliation) and wrongful termination, later adding a Labor Code unpaid accrued vacation pay claim. Before the Labor Code claim was added (although it was disclosed in an answer to an earlier interrogatory by plaintiff), defendant served a CCP § 998 offer for $65,000 plus a costs waiver before the Labor Code claim was formally in the lawsuit. Plaintiff lost all the claims except the Labor Code vacation pay claim which resulted in a jury verdict/trial court penalty add-on totaling about $28,500. Later, the trial judge awarded plaintiff $495,549.75 in attorney’s fees and $84,035.40 in costs to plaintiff as prevailing party on the Labor Code claim. The trial judge also denied Schools’ requests for costs based on the theory that plaintiff did “beat” the defense 998 offer.
In a 2-1 decision, the appellate court affirmed the fee and costs rulings, but overturned the summary judgment on plaintiff’s retaliation claim. Justice Stewart, in dissent, would have affirmed the retaliation summary judgment but reversed the vacation pay award, as well as the fees and costs awarded to plaintiff based on the Labor Code claim.
The defense argued that the fees award to plaintiff included non-compensable work on claims other than the Labor Code claim. However, that did not prevail because plaintiff’s counsel did a smart thing—they carefully apportioned out unsuccessful FEHA work and only included interrelated non-Labor Code work in their fee submissions. The appellate majority justices liked this showing, as did the trial court, observing that Labor Code fees do not have to proportional at all to the $28,500 “compensatory” award and that the allocation was proper.
Schools then argued that plaintiff did not “beat” the 998 offer because, at the time of the offer, there was no Labor Code claim and the defense got a zero award on all of the other claims. The majority disagreed. Aside from the fact that the defense was put on notice of the Labor Code claim through earlier interrogatory answers, section 998 looks at the entire result in a case, not just on a claim-by-claim basis. Success is gauged in relation to the ultimate judgment, with the majority finding it would be unworkable to determine success on each claim as far assessing whether a party prevailed for section 998 purposes. The majority found that an offeror faced with new claims has two choices: make a new 998 offer or proceed to trial with the hopes that the new claim (as well as others) can be defensed below the 998 offer.
Justice Stewart would have reversed the vacation pay award as well as the fees/costs award in favor of plaintiff. She colorfully put it this way: “I would reverse the judgment on this vacation-pay tail and the half million dollar-fee dog that goes with it.”
BLOG OBSERVATION—So what is Justice Stewart referring to? She is referring to an oft-cited quotation by Retired Justice Wallin: "All too often attorney fees become the tail that wags the dog in litigation." Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993). So Justice Stewart may have creatively decided to flip the tail/dog analogy, but that is the derivation of the reasoning in her dissent.