All Causes Of Action Related To The Same Common Issue And Were So Intertwined That Apportionment Was Impracticable.
For an interesting discussion of The Independent Wholesale Sales Representatives Contractual Relations Act of 1990 (Civ. Code section 1738.11 et seq.), Newman v. Knit Creations, Inc., Case No. B292659 (2d Dist., Div. 1 March 30, 2020) (unpublished) is a good read.
The Act sets out requirements for the contracts between manufacturers and the independent contractor salespeople who represent them. The Act also provides the salesperson a right of action and ability to recover prevailing party attorney’s fees, along with treble damages for violations of the Act upon proof of intentional malfeasance.
Here, Plaintiff salesperson sued Defendant manufacturer, after termination of her contract, for underpaying commissions and travel costs. Defendant cross-complained claiming, among other things, Plaintiff had made misrepresentations to claim commissions.
More than a year into the litigation, and just shortly before trial, Plaintiff successfully moved, unopposed, for leave to amend her complaint to add a claim against Defendant under the Act. Along with this newly added claim, Plaintiff also prayed for statutory fees and treble damages.
Following a bench trial, the trial court entered judgment in favor of Plaintiff on both the first amended complaint and cross-complaint – finding Plaintiff was entitled to $41,048.60 in damages for unpaid commissions, and that Defendant had violated the Act by failing to identify the commission rate for discounted sales. However, the trial court did not award treble damages as it did not find that Defendant’s violation was intentional.
As prevailing party under the Act, Plaintiff moved post-trial for fees of $85,750 plus a lodestar multiplier of two – for a total of $171,500 – based on the complexity of the case and assumed risks Plaintiff’s counsel faced in representing her. Defendant argued Plaintiff was entitled to less than $10,000 in fees as she: (1) was not entitled to fees incurred prior to amending her complaint to add a claim under the Act; (2) could not recover fees for responding to demurrers which were partially successful; (3) was only entitled to fees incurred in prosecuting her claim for violation of the Act; (4) was not able to recover fees related to defending against the cross-complaint; and (5) was inflexible and prevented the case from settling prior to trial.
The trial court bought none of Defendant’s arguments – finding her counsel’s efforts “so intertwined that it would be impracticable to separate the attorney’s time into compensable and noncompensable units as all of the claims related to the payment of the commission at issue under . . . section 1738.10.” Plaintiff was awarded the entire amount of fees incurred – $85,750 – with no multiplier.
Defendant unsuccessfully appealed – with the 2/1 DCA finding no abuse of discretion in the trial court’s decision not to apportion the attorney fee award to segregate time based upon the common issue on which the fees were incurred and inextricably intertwined.
Comments