Nishiki v. Danko Meredith, APC
Nishiki v. Danko Meredith, APC
Opinion of the Court
*887When an employee resigns without notice, California law requires the employer to pay all wages within 72 hours. ( Lab. Code § 202, subd. (a)
I. BACKGROUND
The pertinent facts are largely undisputed. Nishiki worked for defendant, a law firm, as office manager and paralegal. She resigned by sending an email to defendant's two partners, Danko and Meredith, at 6:38 p.m. on Friday, November 14, 2014. In the email, she noted that her unused vacation time "needs to be paid within 72 hours of my notice of resignation." She sent a copy of the email to Sharman Blood, defendant's bookkeeper, and Blood sent an email about Nishiki's resignation to both partners at 9:08 a.m. on Saturday, November 15.
At the time Nishiki resigned, she was owed $2,880.31 for her unused vacation time. Defendant mailed her a handwritten check on Tuesday, November 18. The check, signed by Meredith, had an inconsistency: the amount in numerals in the dollar amount box was "2,880.31," the correct amount; however, the amount as spelled out was "Two thousand eight hundred and 31/100," or $80 less than the correct amount.
On Wednesday, November 26, at 9:46 a.m., Nishiki sent an email to Meredith telling her she had been unable to deposit the check because of the inconsistency between the numerical and written amounts, and asserting she was therefore entitled to waiting time penalties. Just after midnight on Thursday, November 27-Thanksgiving Day-Meredith responded in an email, "No check has been refused or returned so we are unable to confirm it was not honored upon presentation to the bank." Nishiki responded that she had taken the check to the bank, but that the bank could not accept it because of the discrepancy. On Monday, December 1, Meredith sent an email in response: "Notwithstanding what your bank told you, the check you were sent is negotiable. If you would like to return the check to the office, we will issue you a new one. If you wish to keep the check, we'll issue a second *889check for $80. We can mail the check or you can pick it up at the office. Let me know what you want to do." Nishiki replied that the bank was not able to accept a check with two different amounts on it, and said she was out of state but had mailed the check to defendant. Defendant mailed a corrected check for $2,880.31 to Nishiki on Friday, December 5, 2014.
Nishiki filed a complaint with the commissioner. She sought (1) unpaid vacation wages of $366.88; (2) rest period premiums of $23,718.75; and (3) waiting time penalties for the delay in receiving the $2,880.31 *632check, in the amount of $7,500, calculated as 30 days at the rate of $250 per day.
The hearing officer rejected Nishiki's first two claims for relief. He found Nishiki had been paid for all of her accrued vacation time and that she had not been denied rest periods. As to her waiting time claim-that is, for the time between her resignation and when she received the corrected check-the hearing officer found she was entitled to the penalties for the time between November 18, 2014 and December 5, 2014, and thus awarded her $4,250, or her $250 average daily wage times 17 days.
Defendant appealed the award to the superior court. (§ 98.2.) After a trial de novo, the court found Nishiki was entitled to 17 days of waiting time penalties, or $4,250. Nishiki moved for statutory attorney fees (§ 98.2, subd. (c) ), and the court awarded her $86,160 in fees. Defendant appealed from the judgment.
II. DISCUSSION
A. Waiting Time Penalties
Defendant contends Nishiki is not entitled to waiting time penalties. Section 202, subdivision (a) provides in pertinent part: "If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting." Section 203, subdivision (a) establishes the waiting time penalties: "If an employer willfully fails to pay, without abatement or reduction, in accordance with Section[ ] ... 202 ..., any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days."
Defendant's first contention is that the 72-hour period for paying wages did not begin to run at 6:38 p.m.-that is, after the close of *890business-on Friday, November 14, 2014, but rather at the beginning of business hours on Monday, November 17. The parties have not cited any authority considering whether the 72 hours begins to run immediately if the manner in which the employee resigns does not ensure that the employer would actually receive the notice until business opens on a later day, and our own research has disclosed none. In considering this issue, however, we are guided by the rule that in interpreting a statute, "[w]e presume that ... legislative provisions were not intended to produce unreasonable results and adopt a common sense construction over one leading to mischief or absurdity." ( In re Samano (1995)
The construction of section 202 Nishiki urges, under which the time begins to run as soon as she submits her resignation, regardless of whether her employer actually receives the notice of resignation, falls afoul of this rule. There is no evidence her employers were working or reading their business email after business hours on Friday, November 14, and thus no basis to conclude they actually received her resignation on that date. If Nishiki's position is correct, her accrued wages were due on Monday, May 18-the first business day after her after-hours email. The result would be that, rather than having 72 hours to calculate and pay Nishiki's wages, defendant might have only the length of a *633single work day.
We conclude, therefore, that the 72 hours did not begin to run when Nishiki sent her email. We need not decide whether it commenced on Saturday, November 15, by which time defendant's bookkeeper had read her resignation email, or at the start of business on Monday, November 17. Based on either of these dates, the November 18, 2014 check was timely.
As we have discussed, however, the amount stated in numerals on the check was correct, but the amount as written out in words was eighty dollars less than the amount owed to Nishiki. Defendant contends the evidence shows that the discrepancy in the check was not willful for purposes of section 203, and therefore argues waiting time penalties are unwarranted.
*891"The purpose of section 203 is to compel the prompt payment of earned wages; the section is to be given a reasonable but strict construction. [Citation.] ... '[The] statute should have reasonable construction. Its design is to protect the employee and to promote the welfare of the community .... But it is to be observed that the most formidable objection to the statute derives its principal force from the supposed hardships of a hypothetical case wherein the employer is without fault or the employee is guilty of culpable conduct. The statute ... contemplates that the penalty shall be enforced against an employer who is at fault. It must be shown that he owes the debt and refuses to pay it. He is not denied any legal defense to the validity of the claim.' [¶] However, to be at fault within the meaning of the statute, the employer's refusal to pay need not be based on a deliberate evil purpose to defraud [employees] of wages which the employer knows to be due. As used in section 203, 'willful' merely means that the employer intentionally failed or refused to perform an act which was required to be done ." ( Barnhill v. Robert Saunders & Co. (1981)
Applying this principle, the Court of Appeal in Gonzalez v. Downtown LA Motors, LP (2013)
Nothing in the record supports a conclusion that defendant knew or intended to do what it was doing when someone wrote two different amounts on the check.
We must next consider the effect of the delay in sending Nishiki a corrected check. Nishiki told Meredith by email on the morning of Wednesday, November 26, 2014, that she had been unable to deposit the check because of the discrepancy. Meredith sent an email on Monday, December 1, telling Nishiki the check was negotiable, and offering either to issue a second check for $80 or to send a new check for the correct amount if Nishiki returned the original check.
*635California law provides that, "If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers ." ( Cal. U. Com. Code, § 3114, italics added.) The check, therefore, was worth eighty dollars less than the amount defendant calculated Nishiki was owed. Rather that correcting the clerical error immediately when notified of it, either by stopping payment on the original check and issuing a new check for the full amount or by sending an additional check for $80, defendant waited until Friday, December 5-apparently after receiving the original check-to issue a new check, back-dated to *893November 18. In doing so, defendant violated its statutory obligation to pay wages promptly. We conclude Nishiki was entitled to waiting time penalties for the period between November 26, when defendant had notice of the error, and December 5, when it sent the corrected check, for a total of nine days.
Defendant contends that, if waiting time penalties are proper, the proper measure is $80 per day, that is, the amount of the underpayment, rather than the amount of Nishiki's daily wage. We disagree. Section 203 provides that if an employer willfully fails to pay the wages of an employee who is discharged or who quits, "the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid." This provision has been interpreted to mean the penalty is an amount "equal to the employee's daily wages for each day ... that the wages are unpaid." ( Caliber Bodyworks, Inc. v. Superior Court (2005)
B. Attorney Fees
Defendant also challenges the trial court's award of attorney fees. Nishiki requested fees for 121.2 hours, at a rate of $500 per hour, multiplied by 1.5, for a total requested award of $90,900. This request included all hours her counsel had spent on the court case. The court granted the motion and awarded fees of $86,160.
Section 98.2, subdivision (c) 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 *894parties to the appeal, and assess that amount as a cost upon the party filing the appeal. An *636employee is successful if the court awards an amount greater than zero ." (§ 98.2, subd. (c), italics added.) This statute "is not a prevailing party fee provision, instead it is a one-way fee-shifting scheme that penalizes an unsuccessful party who appeals the commissioner's decision." ( Arias v. Kardoulias (2012)
"[I]f an employee fails to pay wages in the amount, time, or manner required by contract or statute, the employee may seek administrative relief by filing a wage claim with the commissioner or, in the alternative, may seek judicial relief by filing an ordinary civil action for breach of contract and/or for the wages prescribed by statute. [¶] Labor Code section 98 includes remedial procedures for adjudicating wage claims, enforced by the Division of Labor Standards Enforcement under the direction of the commissioner. It states that the commissioner 'shall have the authority to investigate employee complaints.' ( Lab. Code, § 98, subd. (a).) The commissioner 'may provide for a hearing in any action to recover wages, penalties, and other demands for compensation.' (Ibid .)" ( Post v. Palo/Haklar & Associates (2000)
The issue in Arias, supra,
" ' "On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion." ' " ( Conservatorship of Whitley (2010)
With these principles in mind, we consider first defendant's contention that the trial court erred in awarding Nishiki all of her attorney fees, rather than reducing them to account for the fact that she did not prevail on two of her claims. Defendant relies on the general principle that where a statute allows attorney fees for a prevailing party, a court may reduce attorney fees where a claimant achieves only limited success, and may deny attorney fees for time spent litigating unsuccessful claims. (See Chavez v. City of Los Angeles (2010)
*896Harman v. City and County of San Francisco (2006)
Defendant's reliance on this principle is unavailing. The authorities on which it relies were "conventional, prevailing party" cases ( Arias , supra , 207 Cal.App.4th at p. 1438,
*638They did not implicate the legislative intent in enacting section 98.2-a one-way provision allowing attorney fees only against a party who appeals an administrative award, in order to discourage such trial court actions. Moreover, the statute explicitly provides that "[a]n employee is successful if the court awards an amount greater than zero." (§ 98.2, subd. (c).) The Legislature thus made clear that a claimant who achieves only minimal success should be considered successful for purposes of an award of attorney fees. (See Lolley v. Campbell, supra , 28 Cal.4th at p. 376,
Moreover, it warrants emphasis that it was defendant, not Nishiki, that chose to appeal and seek a trial de novo after suffering only a relatively modest loss before the commissioner, having defeated two other claims for which Nishiki sought considerably higher damages. If Nishiki consequently was required to incur substantial attorney fees to retry the entire case, including issues on which she did not prevail before the commissioner, defendant has only itself to blame. (See Arneson v. Royal Pacific Funding Corp., supra, 239 Cal.App.4th at p. 1279, fn. 5,
We also reject defendant's other challenges to the fee award. We bear in mind that, "[w]ith respect to the amount of fees awarded, there is no question our review must be highly deferential to the views of the trial court. [Citation.] As our high court has repeatedly stated, ' " '[t]he "experienced trial judge is the best judge of the value of professional services rendered in his [or her] court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong"-meaning that it abused its discretion.' " ' [Citations.]" ( Children's Hospital & Medical Center v. Bontà (2002)
Defendant contends the billing statements are "suspect" because some of them must reflect work done in connection with the administrative hearing, for which attorney fees are not available. ( Sampson v. Parking Service 2000 Com., Inc. (2004)
We are likewise unpersuaded that the trial court abused its discretion by applying a 1.5 multiplier. After calculating the "lodestar," or total attorney hours expended multiplied by a reasonable hourly rate, the court may "adjust the lodestar amount to take account of unique circumstances in the case. [Citations.] Some factors the court may consider in adjusting the lodestar include: '(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award. [Citation.]' [Citation.] 'The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services.' [Citation.]" ( Amaral , supra , 163 Cal.App.4th at p. 1216,
Finally, we reject defendant's challenge to the hourly rate of $500. "In determining hourly rates, the court must look to the 'prevailing market rates in the relevant community.' [Citation.] The rates of comparable attorneys in the forum district are usually used. [Citation.] In making its calculation, the court should also consider the experience, skill, and reputation of the attorney requesting fees. [Citation.] The court may rely on its own knowledge and familiarity with the legal market in setting a reasonable hourly rate. [Citation.]" ( *640Heritage Pacific Financial, LLC v. Monroy (2013)
We are not persuaded that the trial court's award was " ' "clearly wrong." ' " ( Ketchum v. Moses , supra , 24 Cal.4th at p. 1132,
Nishiki argues she is also entitled to the attorney fees she incurred in this appeal. We agree. ( Eicher v. Advanced Business Integrators, Inc. , supra , 151 Cal.App.4th at p. 1384,
III. DISPOSITION
The judgment is reversed with directions. On remand, the trial court shall enter a new judgment reducing the waiting time penalty from $4,250 to $2,250. In all other respects, the judgment is affirmed. On remand, the trial court shall award attorney fees for the appeal in an amount to be determined by the trial court. Nishiki shall recover her costs on appeal. ( Cal. Rules of Court, rule 8.278(a)(3).)
We concur:
Streeter, Acting P.J.
Reardon, J.
Judge of the Superior Court of California, City and County of San Francisco, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
All undesignated statutory references are to the Labor Code.
For ease of reference, we shall refer to Danko Meredith, P.C. as "defendant," and shall refer to the two partners, Michael Danko and Kristine Meredith as "Danko" and "Meredith," respectively.
Indeed, as defendant points out, under Nishiki's construction, if an employee resigned after hours on a Friday before a three-day holiday weekend, the employer would be unable to comply with the 72-hour deadline.
That intent is implicit in section 202, and is made explicit in another section, which provides that an employer who lays off employees engaged in oil drilling shall be deemed to have made immediate payment of earned and unpaid wages "if the wages of such employees are paid within such reasonable time as may be necessary for computation or payment thereof; provided, however, that such reasonable time shall not exceed 24 hours after discharge excluding Saturdays, Sundays, and holidays ...." (§ 201.7, italics added).
A good faith dispute about whether any wages are due precludes imposition of waiting time penalties. (Cal. Code Regs., tit. 8, § 13520 ; Amaral v. Cintas Corp. No. 2 (2008)
At the court trial of this matter, the parties presented testimony on the issue of whether Nishiki was deprived of rest breaks. At the end of the day, the court asked the parties when they could return to try "the second issue," i.e., the issue of waiting time penalties. Because Nishiki had family obligations elsewhere, the court suggested the parties stipulate to the pertinent facts. Defense counsel indicated he would like to present testimony on "the intent in sending the check," and the court replied, "It's not like it's a general intent crime. And that is you don't have to intend to cause injury. You just failed to do something that you should have. Intent is not there." The court then gave the parties the opportunity to submit additional briefing on the issue. Its written ruling stated simply, "The Court finds for Plaintiff on the issue of Waiting Time Penalty. Plaintiff is entitled to 17 days waiting time penalties."
We find some support for this conclusion in another provision of the Labor Code. Section 203.1 provides that an employer who pays wages (including wages due under section 202 ) by a check that is refused payment because drawn on a nonexistent bank account or an account with insufficient funds may be liable for a penalty of up to 30 days' wages and fringe benefits, so long as the check was presented within 30 days after receipt. (§ 203.1.) However, "this penalty shall not apply if the employer can establish to the satisfaction of the Labor Commissioner or an appropriate court of law that the violation of this section was unintentional." (Ibid. ) By enacting this statute, the Legislature intended employers "to be spared the payment of penalty wages in instances of innocent and excusable error." (People v. Hampton (1965)
Defendant suggests Nishiki "intentionally and manipulatively caused" the delay because she notified defendants of the problem with the check the day before Thanksgiving, "thus effectively preventing the problem from being corrected until five days later on December 1," and that she should be equitably estopped from profiting from this "wrongdoing." (See Battuello v. Battuello (1998)
At the hearing on the attorney fee motion, the court stated it would award fees of "[$]60,600 times 1.5." The written order reflects an award of $57,440, with a multiplier of 1.5, for a total of $86,160. Despite the minor deduction, there seems to be no dispute that the court awarded fees for all hours counsel spent.
The amendment referred to was the addition of the following sentence to section 98.2, subdivision (c): "An employee is successful if the court awards an amount greater than zero." (Stats. 2003, ch. 93, § 2 (c), p. 791; see Sonic-Calabasas A., Inc. v. Moreno (2011)
These challenges include the contentions that the fee award is exorbitant because the "sole successful claim was extraordinarily simple," that it is not possible to distinguish in counsel's billing statements time spent on the successful and unsuccessful claims, and that the award bears no reasonable relation to Nishiki's degree of success.
The declaration of Nishiki's counsel stated, "I agreed to represent Plaintiff Taryn Nishiki on a contingency basis for her appeal of this matter." Defendant argues that, since defendant rather than Nishiki appealed the commissioner's decision, the declaration does not show that counsel represented her in defendant's appeal of the decision. We reject this flyspecking argument.
Reference
- Full Case Name
- Taryn NISHIKI, and v. DANKO MEREDITH, APC, and
- Cited By
- 24 cases
- Status
- Published