Smith v. Rae-Venter Law Group, H018775.
| Citation | 106 Cal.Rptr.2d 873,89 Cal.App.4th 239 |
| Decision Date | 21 May 2001 |
| Docket Number | No. H018775.,H018775. |
| Court | California Court of Appeals |
| Parties | Timothy L. SMITH, Plaintiff and Appellant, v. RAE-VENTER LAW GROUP, Defendant and Appellant. |
Timothy L. Smith, in pro. per., Gregg L. Kays, Norland & Kays, San Jose, for Plaintiff and Appellant.
Stephen J. Hirschfeld, Felicia R. Reid, Donna M. Rutter, Curiale, Dellaverson, Hirschfeld, Kelly & Kraemer, San Francisco, for Defendant and Appellant.
This appeal arises out of a dispute between Timothy L. Smith ("Smith") and his former employer, the Rae-Venter Law Group ("RVLG"). Following his resignation from RVLG, Smith presented disputed wage claims to the California Labor Commission. At an administrative hearing on those claims, Smith achieved partial success: he secured an award that included vacation pay and expense reimbursements but his claims for a bonus and for statutory waiting time penalties were rejected. Dissatisfied with the labor commissioner's decision, Smith appealed to the superior court, which conducted a trial de novo. At the conclusion of that trial, the court granted Smith the same relief awarded him by the labor commissioner except that it added interest on his non-wage claims. Based on its determination that Smith had succeeded in his appeal from the labor commissioner's decision, the trial court denied RVLG the statutory attorneys' fees and costs it sought.
RVLG appeals, claiming the trial court erred in denying its fees and costs and in awarding Smith's costs. Smith cross-appeals, asserting that he is entitled to statutory waiting time penalties. As we explain below, we agree with RVLG. We therefore reverse the judgment to the extent it denies RVLG its fees and costs and we remand the matter for further proceedings.
RVLG, a law firm specializing in biotechnology patent law, first began operations in September 1995. Smith, then a recent law school graduate with a Ph.D. in molecular biology, joined RVLG at its inception as an associate attorney.
Smith resigned his employment with RVLG a year later, in September 1996. In his letter of resignation, Smith asked RVLG to pay him for four weeks of accrued vacation and to reimburse him for certain business expenses and for health insurance. RVLG responded with a written memorandum in which it disputed both Smith's claim for vacation wages and his business expense claim. RVLG did reimburse Smith for health insurance premiums as demanded, however.
Unhappy with RVLG's resolution of his demands, Smith complained to the California Labor Commissioner ("commissioner"). In October 1996, the commissioner gave RVLG notice of Smith's claims. That notice repeated Smith's claims for vacation wages and for reimbursement of business expenses. In addition, Smith claimed entitlement to unpaid bonuses and sought reimbursement of a deduction taken from his final paycheck. A preliminary conference, set for November 1996, failed to resolve the disputed claims. Thereafter, in July 1997, the commissioner filed a formal complaint on Smith's behalf. Like the earlier notice, the complaint sought reimbursement for claimed business expenses and for the deduction from Smith's final pay. The complaint also repeated Smith's earlier demand for vacation and bonus wages, although in somewhat higher amounts. In addition, the complaint included a new claim for reimbursement of periodic deductions taken from Smith's wages for unemployment insurance. The complaint also requested penalty wages and interest. (Labor Code, §§ 203, 98.1.)1
In late August 1997, a labor commission hearing officer conducted a hearing on Smith's complaint. Several days later, in early September 1997, the hearing officer made an award to Smith totaling $8,878.57. The award included $6,865.31 in wages, representing payment for four weeks of vacation together with reimbursement for the unemployment insurance deductions; it also included statutory interest on those wages, which amounted to $632.94; finally, it included "other compensation" totaling $1,380.32, the amount of the claimed business expenses. The hearing officer found against Smith on his other claims. Thus, the hearing officer rejected Smith's claim for $12,000 in bonuses. She also denied Smith's claim for $411.54 deducted from his final pay, based on her finding that the sum represented duplicate compensation to him. Finally, the hearing officer determined that no waiting time penalties were due, since a bona fide dispute existed between the parties regarding Smith's wage claims. The labor commission decision was served on the parties by mail.
Within 10 days, RVLG sent the commissioner the full amount of the award, by cashier's check made payable to Smith. A week later, on September 19, 1997, Smith filed his timely notice of appeal, seeking a trial de novo on his claims. As a result of Smith's appeal, the commissioner returned RVLG's check.
In February 1998, a two-day court trial de novo was conducted in Santa Clara County Superior Court. In his trial brief, Smith listed his claimed damages, which included unpaid vacation and bonus wages, unreimbursed business expenses, and unauthorized deductions from his pay, plus interest on all of those amounts. He also sought waiting time penalties. At trial, both parties submitted testimonial and documentary evidence and written and oral argument. The court then took the matter under submission, filing a memorandum of decision less than two weeks later. The trial court concluded that Smith was entitled to payment for vacation wages and to reimbursement both for the unemployment insurance deductions from his pay and for the unreimbursed business expenses, together with interest on all of those amounts from the date of his termination. However, like the commissioner, the court refused to award Smith the other amounts he sought, including $12,000.00 in bonuses, $411.54 deducted from his final pay, and $9,966.40 in waiting time penalties.
So far as the record discloses, Smith did not object below to the trial court's ruling. RVLG, on the other hand, challenged the court's decision to award Smith interest on his nonwage claims (the business expenses). RVLG also made a post-trial motion for statutory attorneys' fees and costs. In April 1998, the trial court issued a formal order after hearing, in which it denied RVLG's motion for fees and costs and overruled RVLG's objections to the statement of decision.
Judgment was entered on May 4, 1998. Smith filed a memorandum of costs three days later.
In July 1998, RVLG filed a notice of appeal. Smith's cross-appeal followed. Both are now before us.
The primary issue presented by RVLG's appeal is its entitlement to statutory attorneys' fees and costs. That issue turns on a determination of whether Smith was successful in his appeal from the labor commissioner's decision. Secondarily, RVLG contests the trial court's post-judgment award to Smith of his costs of suit.
The question raised by Smith's cross-appeal is whether the trial court erred in denying him statutory waiting time penalties.
Before turning to the specific issues before us, we begin with a brief review of the procedural context in which this dispute arose. As noted above, Smith first brought his unresolved post-termination claims to the Labor Commissioner.2 The Labor Code specifically authorizes such a procedure as an alternative to a civil action.
The labor commissioner has the authority to investigate employee complaints and to conduct hearings in actions "to recover wages, penalties, and other demands for compensation." (§ 98, subd. (a).) At the conclusion of any such hearing, the commissioner files a written order, decision, or award. (§ 98.1.) The commissioner's award "shall accrue interest on all due and unpaid wages ... until the wages are paid from the date that the wages were due and payable ...." A labor commission award may include statutory "waiting time" penalties, which are assessed against employers who willfully fail to pay wages when due. (§ 203.)
Both parties have the right to appeal the commissioner's decision to the trial court. (§ 98.2, subd. (a).) Although denominated an "appeal" from the decision of the labor commissioner, the proceeding in the trial court is de novo. (Ibid.; Post v. Palo/Haklar & Associates, supra, 23 Cal.4th at pp. 947-948, 98 Cal.Rptr.2d 671, 4 P.3d 928.) It is a new trial in the fullest sense: the commissioner's decision is entitled to no weight whatsoever, and the facts presented to the trial court may include entirely new evidence. (Post v. Palo/Haklar & Associates, supra, 23 Cal.4th at pp. 947-948, 98 Cal.Rptr.2d 671, 4 P.3d 928.) Thus, the trial court hears the dispute "not as an appellate court, but as a court of original jurisdiction, with full power to hear and determine it as if it had never been before the labor commissioner." (Collier & Wallis, Ltd. v. Astor (1937) 9 Cal.2d 202, 205, 70 P.2d 171.) "The decision of the trial court,...
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