Opinion
G054907
11-02-2018
AMANDA QUILES, Plaintiff and Respondent, v. ARTHUR J. PARENT, JR., Defendant and Appellant.
Law Office of Stephen A. Madoni and Stephen A. Madoni for Defendant and Appellant. Bryan Schwartz Law, Bryan Schwartz, Logan Starr; Levene, Neale, Bender, Yoo & Brill, Daniel H. Reiss and Beth Ann R. Young for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2010-00425532) OPINION Appeal from a postjudgment order of the Superior Court of Orange County, William D. Claster, Judge. Affirmed. Law Office of Stephen A. Madoni and Stephen A. Madoni for Defendant and Appellant. Bryan Schwartz Law, Bryan Schwartz, Logan Starr; Levene, Neale, Bender, Yoo & Brill, Daniel H. Reiss and Beth Ann R. Young for Plaintiff and Respondent.
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INTRODUCTION
In this panel's per curiam opinion in Quiles v. Parent (2017) 10 Cal.App.5th 130 (Quiles I), we ordered issuance of a writ of supersedeas requiring that enforcement of the remaining unpaid portion of the amended judgment entered against defendant Arthur J. Parent, Jr. (Parent), which solely consisted of attorney fees and costs, be stayed pursuant to Code of Civil Procedure section 917.1, subdivision (d). (All further statutory references are to the Code of Civil Procedure unless otherwise specified.) In our disposition in Quiles I, we ordered issuance of that writ without prejudice to plaintiff Amanda Quiles filing a motion in the trial court seeking an order requiring Parent to post a discretionary bond under section 917.9. Quiles did file such a motion which the trial court granted; the court required Parent to post a $1.5 million undertaking to thereafter stay execution of the judgment against him. Parent filed a petition in this court seeking a writ of mandate challenging the court's discretionary undertaking requirement. We summarily denied the petition.
Parent filed this appeal from the order imposing the undertaking requirement. He argues the trial court erred by concluding that it had discretion to impose an undertaking under section 917.9. He also argues the amount of the required undertaking exceeds that which is permitted under section 917.9. He does not argue that, assuming section 917.9 vested the trial court with discretion to impose a discretionary bond, the trial court improperly evaluated the criteria upon which the court was to exercise its discretion.
We reject Parent's arguments and affirm the court's order imposing the undertaking requirement.
BACKGROUND
The relevant procedural background of this case preceding the trial court's imposition of a discretionary undertaking was summarized in our prior opinion in this case, Quiles I, supra, 10 Cal.App.5th 130, as follows:
"Quiles (and other plaintiffs) initially filed this case in 2010 as a wage and hour class action against Parent (and additional defendants). The complaint featured causes of action under the Labor Code and the federal Fair Labor Standards Act of 1938 (FLSA; 29 U.S.C. § 201 et seq.). Quiles dismissed her individual wage and hour claims to allow her subsequently added wrongful termination claim to proceed to trial.
"Quiles pursued her wrongful termination cause of action under the FLSA. (29 U.S.C. § 215(a)(3) [unlawful 'to discharge ... any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter'].) FLSA claims may be brought 'in any Federal or State court of competent jurisdiction . . . ." (29 U.S.C. § 216(b).) As to damages in a FLSA wrongful termination action, an employer 'shall be liable for such legal or equitable relief as may be appropriate to effectuate the purposes of [the statute], including without limitation . . . the payment of wages lost and an additional equal amount as liquidated damages.' (29 U.S.C. § 216(b).) 'The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.' (29 U.S.C. § 216(b).)
"A jury returned a special verdict in favor of Quiles. The jury found that (1) Quiles's lawsuit was a substantial motivating reason for her discharge; (2) defendants' (including Parent's) conduct was a substantial factor in causing harm to Quiles; and (3) defendants failed to prove that they would have made the same decision based upon a legitimate, nonretaliatory reason.
"The jury found Quiles suffered damages as follows: (1) economic damages for loss of past earnings—$3,000; (2) noneconomic loss, including emotional distress—$27,500; and (3) punitive damages—$350,000. The trial court awarded an additional sum of $3,000 for 'liquidated damages.' (29 U.S.C. § 216(b).) Blank lines were included in the initial judgment for reasonable attorney fees and costs of litigation. In sum, when judgment was entered on April 19, 2016, the total damages award stood at $383,500.
"Defendants (including Parent) moved for a new trial. The court conditionally granted the new trial motion, subject to Quiles consenting to a reduction of the punitive damage award to $175,000. (See § 662.5, subd. (a)(2).) Quiles accepted the proposed reduction, bringing the total damage award down to $208,500.
"Also after the entry of the initial April 2016 judgment, Quiles sought attorney fees and costs in accordance with California procedure. On May 5, 2016, Quiles filed a memorandum of costs. (Cal. Rules of Court, rule 3.1700(a).) On June 20, 2016, Quiles filed a motion for attorney fees. (Cal. Rules of Court, rule 3.1702(b); § 1033.5, subd. (c)(5)(A).) Defendants filed a motion to tax costs (Cal. Rules of Court, rule 3.1700(b)) and an opposition to the motion for attorney fees. The court conducted a hearing on these matters on August 26, 2016.
"The court awarded $689,310.04 in attorney fees to Quiles by way of a lengthy statement of decision entered on September 27, 2016. In a separate September 30 order, the court awarded $50,591.69 in costs to Quiles. An amended judgment was entered on October 18, 2016, which reflected the updated damage award (total of $208,500), the attorney fee award ($689,310.04), and the cost award ($50,591.69).
"On December 2, 2016, Parent filed a notice of appeal." (Quiles I, supra, 10 Cal.App.5th at pp. 134-135.)
Parent's appeal from the amended judgment solely challenges the trial court's awards of attorney fees and costs. (Quiles I, supra, 10 Cal.App.5th at p. 133.)
During the pendency of the appeal, Parent filed a petition for a writ of supersedeas seeking a stay of enforcement of the judgment as to the remaining amount owed on the judgment (attorney fees and costs only). (Quiles I, supra, 10 Cal.App.5th at p. 148.) We granted the petition. (Ibid.) Our disposition reads in part: "Let a writ of supersedeas issue staying enforcement of the remaining amount owed on the judgment, which consists of attorney fees and costs awarded to Quiles and against Parent. . . . [¶] The stay of enforcement proceedings shall not apply to any orders deemed necessary by the trial court to recall or quash writs of execution and levies previously issued. Nor shall the stay of enforcement proceedings apply to any motion brought or relief provided under section 917.9. This court does not intend to express any view as to the merits of any potential motion under section 917.9." (Ibid.)
Quiles thereafter returned to the trial court where she filed an ex parte application to require an undertaking under section 917.9. The trial court granted the application and ordered "for reasons stated in Plaintiff's instant Motion," Parent shall post an undertaking in the amount of $1,109,852.60 pursuant to section 917.9 no later than 15 days from the date of the order if he wished to have a stay of any enforcement of the judgment against him in this matter. The court explained Parent's failure to timely post such an undertaking would result in the denial of any stay of enforcement and would permit Quiles to lawfully collect on the outstanding judgment while the appeal was pending. Parent appealed.
This court summarily denied Parent's petition for writ of supersedeas and request for a temporary stay challenging the court's order imposing the discretionary undertaking under section 917.9. --------
DISCUSSION
I.
SECTION 917.9 AUTHORIZED THE TRIAL COURT TO EXERCISE ITS DISCRETION AND
IMPOSE AN UNDERTAKING IN THIS CASE.
Parent argues the trial court erred by requiring him to post an undertaking pursuant to section 917.9 in order to stay enforcement of the judgment pending the appeal challenging the attorney fees and costs awards. He argues the trial court erred by interpreting section 917.9 as authorizing the court to exercise its discretion to impose an undertaking in the context of a costs-only judgment within the meaning of section 917.1, subdivision (d).
As we stated in Quiles I, supra, 10 Cal.App.5th at pages 145 to 146: "State procedural rules apply to federal causes of action in state court, unless the federal right is defeated thereby. [Citation.] Generally speaking, the use of California postjudgment procedures to recover attorney fees and costs authorized by a federal statute does not appear to be inconsistent with federal law."
Section 917.9 provides: "(a) The perfecting of an appeal shall not stay enforcement of the judgment or order in cases not provided for in Sections 917 .1 to 917.8, inclusive, if the trial court, in its discretion, requires an undertaking and the undertaking is not given, in any of the following cases: [¶] (1) Appellant was found to possess money or other property belonging to respondent. [¶] (2) Appellant is required to perform an act for respondent's benefit pursuant to judgment or order under appeal. [¶] (3) The judgment against appellant is solely for costs awarded to the respondent by the trial court pursuant to Chapter 6 (commencing with Section 1021) of Title 14. [¶] (b) The undertaking shall be in a sum fixed by the court and shall be in an amount sufficient to cover all damages which the respondent may sustain by reason of the stay in the enforcement of the judgment or order. [¶] (c) The undertaking shall be in the sum fixed by the court. The undertaking shall be conditioned upon the performance of the judgment or order appealed from or payment of the sums required by the judgment or order appealed from, if the judgment or order is affirmed or the appeal is withdrawn or dismissed, and it shall provide that if the judgment or order appealed from or any part of it is affirmed, or the appeal is withdrawn or dismissed, the appellant will pay all damages which the respondent may sustain by reason of the stay in the enforcement of the judgment. [¶] (d) For the purpose of this section, 'damages' means either of the following: [¶] (1) Reasonable compensation for the loss of use of the money or property. [¶] (2) Payment of the amounts specified in paragraph (3) of subdivision (a)." (Italics added.)
Parent argues that section 917.9 does not apply to this case because the costs-only judgment is the type of judgment "provided for" in section 917.1, subdivision (d), and thus is expressly excluded from the reach of section 917.9. Section 917.1, subdivision (d), provides: "[N]o undertaking shall be required pursuant to this section solely for costs awarded under Chapter 6 (commencing with Section 1021) of Title 14." Parent relies solely on his interpretation of the statutory language itself; he does not cite any other legal authority, and we have found none, concluding that the trial court may not exercise its discretion to impose an undertaking under section 917.9 for a costs-only judgment.
Viewing section 917.9, subdivision (a)'s phrase "in cases not provided for in Sections 917.1 to 917.8," in isolation from its companion statutes and from the legislative intent regarding the overarching statutory scheme, Parent's argument has facial appeal. Considering the statutory scheme as a whole in light of legislative intent, however, we conclude the Legislature intended section 916 to set forth the general rule that an appeal stays enforcement of a judgment, and that sections 917.1 to 917.9, in general, set forth circumstances where the perfecting of an appeal alone does not stay a judgment. Section 917.1, subdivision (d) is an exception to section 917.1, subdivision (a), which requires an undertaking to bond money judgments. Section 917.1, subdivision (d) does not prohibit the imposition of a discretionary bond under section 917.9.
If Parent's interpretation of section 917.9, subdivision (a) were correct, subdivision (a)(3) of that statute would be entirely surplusage. The Legislature explicitly authorized the imposition of a discretionary undertaking in "costs-only" judgment cases by stating "[t]he perfecting of an appeal shall not stay enforcement of the judgment . . . if the trial court, in its discretion, requires an undertaking and the undertaking is not given" in cases where the judgment against the appellant is solely for costs awarded pursuant to section 1021 et seq. (§ 917.9, subd. (a)(3).) Section 917.1, subdivision (d), cannot be read to simultaneously prohibit any such discretionary undertaking in costs-only judgment cases. It expressly provides that the reach of section 917.1 with regard to not requiring an undertaking in judgments for costs is limited to undertakings imposed under this section itself. (Id., subd. (d) ["However, no undertaking shall be required pursuant to this section solely for costs awarded under Chapter 6 (commencing with Section 1021) of Title 14"], italics added.)
Furthermore, interpreting section 917.9 as authorizing a discretionary undertaking in cases such as the instant cases is consistent with legislative history. As we stated in Quiles I, supra, 10 Cal.App.5th at pages 144 to 145: "A reasonable objection might be raised that the distinction between damages judgments and costs judgments [with regard to automatic stays of the judgment applying to the latter but not the former] makes little sense in a case like the instant one, where the attorney fee award triples the amount of actual damages. But regardless whether section 917.1 in isolation has drawn the right balance, it must be noted that trial courts have discretion to impose an undertaking requirement with regard to a judgment solely for costs. (§ 917.9, subd. (a)(3) [discretionary stay allowed if '[t]he judgment against appellant is solely for costs awarded to the respondent by the trial court pursuant to Chapter 6 (commencing with Section 1021) of title 14'].) This language was also added to the Code of Civil Procedure in 1993. (Stats. 1993, ch. 456, § 14, p. 2535.) It fits hand in glove with a liberal costs-only judgment rule. In a case where the costs judgment is large or the danger of asset dissipation is acute, a trial court can mitigate any injustices arising from the costs-only judgment rule. (See Assem. Com. on Judiciary, Analysis of Assem. Bill No. 58 (1993-1994 Reg. Sess.) § V, p. 6 [after bullet point indicating amendment would codify Bank of San Pedro [v. Superior Court (1992) 3 Cal.4th 797] for specified statute, the next bullet point indicates that the § 917.9 amendment would 'give the trial court the discretion to condition a stay of an award of costs in all other cases upon the filing of a sufficient bond or undertaking'].)"
We addressed the potential applicability of a section 917.9 undertaking requirement in Quiles I, supra, 10 Cal.App.5th at page 145. Noting no argument had been made at that stage of the litigation that a discretionary undertaking should be imposed under section 917.9, we acknowledged the trial court's authority under section 917.9 to entertain a motion for the imposition of a discretionary undertaking: "Many of the points made by Quiles in opposition to this supersedeas petition (e.g., Parent's alleged bad faith in managing the underlying litigation, Parent's alleged attempts to arrange his financial affairs to become judgment proof, the underlying purposes of the FLSA to empower employees in litigation against employers), are better directed to the trial court's discretion under section 917.9." (Quiles I, supra, at p. 145.) In our disposition, we made clear that the stay of enforcement proceedings imposed in Quiles I, pursuant to section 916 by operation of the exception of section 917.1, subdivision (d), would not apply to any future motion brought in the trial court for discretionary relief provided under section 917.9. (Quiles I, supra, at p. 148.)
Parent does not argue the trial court abused its discretion under section 917.9 by imposing the undertaking requirement; his challenge is limited to the trial court's authority for doing so. For the reasons we explained ante, Parent's challenge is without merit.
II.
THE TRIAL COURT DID NOT IMPOSE TOO LARGE AN UNDERTAKING REQUIREMENT.
Parent argues the trial court erred by requiring Parent to post an undertaking in the amount of $1,109,852.60, which was one and one-half times the amount of the "costs-only" judgment on appeal ($739,901.73).
In Quiles I, supra, 10 Cal.App.5th at page 137, we weighed in on the amount of an appropriate undertaking imposed under section 917.1, stating: "An appropriate undertaking would amount to at least one and one-half times the judgment. (See § 917.1, subd. (b).) And the undertaking would be calculated based on the entire judgment ($948,401.73), not just the damages award. (Vadas v. Sosnowski (1989) 210 Cal.App.3d 471, 473 ['costs shall be part of the amount of the judgment for purposes of the undertaking']; see § 917.1, subd. (d) ['Costs awarded by the trial court under Chapter 6 (commencing with Section 1021) of Title 14 shall be included in the amount of the judgment or order for the purpose of applying paragraph (1) of subdivision (a) and subdivision (b).'].)"
The undertaking imposed here was imposed under section 917.9, subdivision (b), which states: "The undertaking shall be in a sum fixed by the court and shall be in an amount sufficient to cover all damages which the respondent may sustain by reason of the stay in the enforcement of the judgment or order." Section 917.9, subdivision (d), defines the term "damages" to mean either: "(1) Reasonable compensation for the loss of use of the money or property" or "(2) Payment of the amounts specified in paragraph (3) of subdivision (a)." Subdivision (a)(3) of section 917.9, as stated ante, refers to cost-only judgments.
Parent argues the court was obligated to use the second definition of "damages" and that any bond requirement was statutorily limited to the amount of the costs-only judgment ($739,901.73). Parent does not cite any legal authority in support of his argument.
The general rule is that an undertaking of a money judgment needs to be for one and one-half times the judgment (if provided by an admitted surety insurer). (§ 917.1, subd. (b) ["The undertaking shall be for double the amount of the judgment or order unless given by an admitted surety insurer in which event it shall be for one and one-half times the amount of the judgment or order"].) This rule is designed to ensure there is enough money secured to pay interest and appellate costs, not just the underlying judgment. (Ibid.) There is no mention of this rule in Parent's appellate briefing or any argument that this rule should not apply to an undertaking imposed under section 917.9. We find no error.
DISPOSITION
The postjudgment order is affirmed. Respondent shall recover costs on appeal.
FYBEL, J. WE CONCUR: O'LEARY, P. J. IKOLA, J.