Why it matters

A California appellate panel recently held that for purposes of awarding attorneys’ fees to the winners of certain legal claims, there can be a prevailing party on one count and a different prevailing party on a separate count. A plaintiff sued her former employer for unpaid wages and overtime, as well as for violations of the state Equal Pay Act. At the end of a trial, a jury awarded her $26,300 on the Equal Pay Act claims but found for her employer on the overtime and wage claims. Both parties filed motions for attorneys’ fees as the prevailing party. The trial court granted both motions and offset the amounts for a net award to the employee of $3,709.19. She appealed, arguing that the trial court erred because there can be only one prevailing party for practical purposes and that she believed it should be the plaintiff, as she was awarded damages. But the appellate panel affirmed, writing that when two attorneys’ fee award statutes are in play in separate causes of action, there can be a prevailing party for one cause of action and a different prevailing party for the second cause of action.

Detailed discussion

Mahta Sharif sued Mehusa, Inc., for unpaid overtime, unpaid wages, and violation of California’s Equal Pay Act. At trial, her former employer prevailed on the overtime and wage claims and a jury awarded Sharif $26,300 on her Equal Pay Act claim.

Sharif then filed a motion for attorneys’ fees under Section 1197.5(g) as the prevailing party on her Equal Pay Act claim. Mehusa countered with a motion for attorneys’ fees and costs under Section 218.5 as the prevailing party on the plaintiff’s wage claim. Granting both motions, the trial court judge offset the awards for a net award to Sharif of $3,709.19.

The plaintiff appealed. On a “practical level,” she was the sole prevailing party, Sharif told the court, because the jury awarded her monetary damages.

The appellate panel disagreed, affirming the trial court’s award.

The Equal Pay Act provides for an award of attorneys’ fees under Section 1197(g), so the plaintiff was entitled to reasonable attorneys’ fees for prevailing on that claim, the court said. At the same time, Section 218.5 is a two-way fee-shifting statute that requires the award of reasonable attorneys’ fees and costs to the prevailing party on wage claims.

Sharif’s position that there can be only one prevailing party in a lawsuit—and that she was that party because of her $26,300 award—was misplaced, the panel said. California courts have repeatedly held that a rigid definition of prevailing party should not be used and should instead “be determined by the trial court based on an evaluation of whether a party prevailed ‘on a practical level.’ ”

The plaintiff was correct that she was entitled to an award of attorneys’ fees as the prevailing party on her Equal Pay Act claim pursuant to Section 1197.5(g). But she was wrong that the defendant shouldn’t get an attorneys’ fee award too.

“The trial court did not err in determining that defendant was the prevailing party on plaintiff’s wage claim,” the court wrote. “In her complaint, plaintiff claimed that defendant failed to pay her $261,998.27 in wages. The jury found that defendant owed her nothing for wages. Thus, defendant was the ‘prevailing party’ on plaintiff’s wage claim—that is, it prevailed on a ‘practical level’ and ‘realized its litigation objectives.’ Accordingly, defendant was entitled to its attorney fees under section 218.5.”

If plaintiff had brought her wage and Equal Pay Act claims in separate actions, Mehusa would have been entitled to recover its attorneys’ fees in the action asserting the wage claim, and Sharif would have been entitled to recover her attorneys’ fees in the Equal Pay Act claim, the panel noted.

“There is no legal or logical reason why defendant should be precluded from recovering its attorney fees on plaintiff’s wage claim simply because plaintiff combined her wage and Equal Pay Act claims in a single action,” the court said. “By providing that the prevailing party under one statute is entitled to fees, and that a different prevailing party under another statute is entitled to fees, the Legislature expressed an intent that there can be two different prevailing parties under separate statutes in the same action. Thus, a net monetary award to a party does not determine the prevailing party when there are two fee shifting statutes involved in one action.”

To read the decision in Sharif v. Mehusa, Inc., click here.