No Finding That Claims Made Or Prosecuted In Bad Faith Failed To Trigger Section 218.5 Cost-Shifting.
Plaintiff and defendant/cross-complainant lost both of their suits after a bench trial, plaintiff losing wage/hour claims and cross-complainant losing fiduciary duty/joint venture cross-claims. The lower court determined both sides should bear their own costs, with no determination made that plaintiff’s employment claims were brought in bad faith. Defendant appealed, claiming entitlement to routine costs under Code of Civil Procedure section 1032(a)(4) and Labor Code section 218.5.
The 4/1 DCA, in Thompson v. Fuhrman, Case No. D075129 (4th Dist., Div. 1 May 28, 2019) (unpublished), determined that defendant was entitled to costs under section 1032(a)(4), but not Labor Code section 218.5.
Even though losing his cross-claims, defendant qualified as a prevailing party for routine costs under section 1032(a)(4), because he is a defendant in a situation where neither plaintiff nor defendant obtained any relief. It did not matter that he lost the cross-claims. (McFarland, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450, 1454 (1991); Cussler v. Crusader Entertainment, LLC, 212 Cal.App.4th 356, 371 (2012).) Nothing In Labor Code section 226 prevented a costs award to defendant, with the 4/1 DCA panel relying on the analogous reasoning in Plancich v. United Parcel Services, Inc., 198 Cal.App.4th 308, 313 (2011) with respect to Labor Code section 1194.
However, defendant was not entitled to costs under Labor Code section 218.5. As a nonemployee party “victor,” there had to be a determination that plaintiff’s employment claims were brought in bad faith, with that not occurring here. So, on remand, defendant will receive some routine costs under CCP § 1032(b), but not Labor Code section 218.5.
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