Filed 2/22/24 Lorta v. Bishop CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

JACOB LORTA et al.,

 Plaintiffs and Appellants,

v.

BISHOP, INC.,

 Defendant and Respondent.

 G062166

 (Super. Ct. No. 30-2018-01006766)

 ORDER MODIFYING OPINION; 

 NO CHANGE IN JUDGMENT

It is ordered that the opinion filed herein on February 13, 2024, be modified 

as follows:

On the caption page delete case number “30-2018-010006766” and insert in 

its place the following: “30-2018-01006766.”

There is no change in the judgment. 
2

SANCHEZ, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

GOODING, J.
Filed 2/13/24 Lorta v. Bishop CA4/3 (unmodified opinion)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication 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. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

JACOB LORTA et al.,

 Plaintiffs and Appellants,

v.

BISHOP, INC.,

 Defendant and Respondent.

 G062166

 (Super. Ct. No. 30-2018-010006766)

 O P I N I O N 

Appeal from a postjudgment order of the Superior Court of Orange County, 

Melissa R. McCormick, Judge. Reversed and remanded.

Donahoo & Associates, Richard E. Donahoo, and Judith L. Camilleri for

Plaintiffs and Appellants.

Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, and Robert 

Mussig for Defendant and Respondent.

* * *
2

Plaintiffs Jacob Lorta, Warren Little, Jorge Lopez, Douglas Boal, and 

Daniel Velasco appeal from the court’s denial of their motion to recover attorney fees 

from defendant Bishop Inc. (Bishop). After plaintiffs initiated the instant action for 

recovery of wages, Bishop voluntarily paid certain wages to plaintiffs. The parties also 

reached a stipulation for settlement whereby Bishop would pay $225,000 to plaintiffs in 

“new money.” The agreement indicated each party would bear its own attorney fees and 

costs. Bishop ultimately did not sign a long form settlement agreement and made no 

payment under the stipulation for settlement. Plaintiffs then filed a motion to enforce the 

settlement agreement pursuant to Code of Civil Procedure section 664.6. After writ and 

appellate proceedings, plaintiffs successfully enforced the settlement agreement. 

Plaintiffs thereafter filed a motion for attorney fees seeking to recover fees 

they incurred after Bishop’s deadline to pay under the settlement agreement. This 

included attorney fees incurred to enforce the settlement agreement and fees to litigate 

the case to trial while simultaneously seeking to enforce the agreement. In denying 

plaintiffs’ motion for attorney fees, the trial court held plaintiffs prevailed on their 

interpretation of the settlement agreement, and the agreement stated each party would 

bear its own fees and costs. The court emphasized plaintiffs had not prevailed under any 

statute because there was no adjudication of any claims.

On appeal, plaintiffs contend the court erred because they were prevailing 

parties entitled to attorney fees under Labor Code sections 1194 and 2261as well as Code 

of Civil Procedure section 1021.5. They claim they were prevailing parties because they 

obtained a net monetary recovery in the lawsuit, and the relevant statutes do not require 

an adjudication of liability. (Code Civ. Proc., § 1032, subd. (a)(4).) For the reasons

below, we agree plaintiffs were prevailing parties under section 1194 and are entitled to 

any post-settlement attorney fees incurred to litigate the action prior to trial. But 

1

All further statutory references are to the Labor Code unless otherwise 

stated.
3

plaintiffs are not entitled to any fees incurred to enforce the settlement agreement. We 

accordingly reverse and remand for the trial court to conduct further proceedings 

consistent with this opinion. 

FACTS2

The Underlying Lawsuit

“In July 2018, the five individual plaintiffs filed a complaint against 

Bishop, alleging they were employed in various construction capacities on public works 

projects for which Bishop was a contractor. They asserted six causes of action: (1) 

failure to pay wages and overtime; (2) failure to pay prevailing wages on public works; 

(3) failure to pay wages of terminated or resigned employees; (4) failure to provide or 

otherwise compensate for missed meal and rest breaks; (5) recovery under public works 

bonds; and (6) unfair competition in violation of Business and Professions Code section 

17200 et seq. 

“In November 2018, Bishop wrote a letter to plaintiffs’ counsel stating it 

had ‘discovered an inadvertent shortfall in the payment of wages made to [plaintiffs].’ It 

enclosed checks for each plaintiff that, in aggregate, amounted to $112,410.66. The 

payments were broken down by checks for each plaintiff’s wages (less withholdings) and 

penalties and interest (without any withholdings). Bishop claimed in the letter that these 

checks fully compensated plaintiffs for back wages, interest, and waiting time penalties. 

It stated, ‘Bishop is providing these payments in good faith based on its discovery of this 

inadvertent payroll error in 2016. These payments are not conditioned on any settlement

or release proposal.’ (Italics added.) The letter went on to acknowledge that these 

2 We summarize some facts from an unpublished opinion issued by another 

panel of this court in a prior appeal. (Lorta et al. v. Bishop, Inc. (Sept. 8, 2021, G059175) 

(Lorta I).) We also grant plaintiffs’ request that we take judicial notice of the record in 

the prior appeal along with documents related to writ proceedings and a petition for 

review.
4

payments did not cover meal and rest break violations, which Bishop denied, but it 

included a settlement offer pursuant to Code of Civil Procedure section 998. That offer is 

not in our record but was presumably rejected. 

“The parties commenced discovery and eventually began informal 

settlement negotiations that reached a point where the parties mutually agreed to suspend 

litigation activities while they pursued a settlement. To facilitate those discussions, the 

court continued the trial date from July 2019 to January 2020. 

“The parties’ settlement negotiations culminated in a mediation on May 28, 

2019. At that mediation, the parties executed a three-page stipulation for settlement. 

Pursuant to that stipulation, Bishop agreed to pay plaintiffs ‘the total sum of $225,000 in 

“new money” in full settlement and compromise of this action and in release and 

discharge of any and all claims and causes of action . . . .’ The words ‘in “new money”’

were handwritten and inserted by interlineation into the agreement. Although the 

stipulation stated that plaintiffs would later provide Bishop with ‘a standard form of a 

Release of all . . . claims,’ it was binding, stating ‘that the settlement and compromise 

stated herein is final and conclusive forthwith, and each attorney represents that his/her 

client(s) has freely consented to and authorized this agreement.’ Elsewhere it stated, 

‘Any provisions of Evidence Code §§ 1115-1128 notwithstanding, this Stipulation is 

binding and, if the parties request the court to retain jurisdiction for purposes of 

enforcement, may be enforced by a motion under Code of Civil Procedure § 664.6 . . . . 

This Stipulation may also be enforced by any other procedure permitted by law in the 

applicable state or federal court.’ ‘Prior to the entry of a Dismissal with Prejudice, the 

parties agree to request the court to retain jurisdiction for purposes of enforcing this

Stipulation pursuant to California Code of Civil Procedure § 664.6.’ The stipulation 

provided that payment pursuant to the settlement was to be made by June 29, 2019. 
5

“Over the ensuing two weeks, the parties’ respective attorneys negotiated a 

long form settlement agreement to a point where both sides had agreed on its terms. The 

long form settlement agreement provided, without objection from Bishop’s counsel, that 

Bishop would pay plaintiffs $225,000 in “new additional money.” It further provided a 

breakdown of exactly how the $225,000 would be divided among the plaintiffs. On June 

7, 2019, Bishop’s counsel wrote, ‘we will sign it immediately if you can get the 

signatures back to us quickly and, if so, everything should be fine to make the payment 

by June 29.’ On June 14, 2019, after plaintiffs forwarded Bishop all of the signatures it 

requested, Bishop’s counsel stated, ‘Thank you, I will get my client’s signatures and start 

preparing the checks.’

“As the payment deadline approached without any executed settlement 

from Bishop, plaintiffs’ counsel began making inquiries. On June 27, 2019, just two days 

before the payment deadline, Bishop’s counsel acknowledged that Bishop was refusing to 

sign the agreement. No reason was given other than “buyer’s remorse.” Ultimately, 

Bishop did not sign the long form settlement agreement and made no payment under the 

stipulation for settlement. 

“The following month, plaintiffs filed a motion to enforce the settlement 

pursuant to Code of Civil Procedure section 664.6. Plaintiffs’ motion did not address 

whether ‘new money,’ as contemplated by the settlement, included the prior payment of 

$112,000 because, up to that point, Bishop had never made that claim. 

“In response to the motion, Bishop changed counsel and opposed the 

motion. In its opposition, Bishop now took the positions that (1) the settlement was an 

unenforceable agreement to agree, and (2) the earlier payment ‘extinguished some or all’

of plaintiffs’ claims. Bishop’s president provided a declaration in which he stated, ‘My 

understanding was that as part of any final agreement, Bishop would only be required to 

pay the difference between the amount stated in the Stipulation — $225,000 — and the 

amount Bishop had already paid to Plaintiffs to resolve most of the claims in the case —
6

approximately $112,000. In other words, I understood that if the parties were able to 

reach agreement on a Long Form Settlement, Bishop would only be obligated to pay 

Plaintiffs an additional $113,000 as part of the deal.’ This was the first time Bishop had 

ever made this claim. 

“The court ultimately rejected Bishop’s claim that the stipulation for 

settlement was merely an agreement to agree, but it concluded there had been no meeting 

of the minds as to the amount of the settlement. The court was persuaded by Bishop’s 

claim in the letter accompanying the earlier $112,000 payment that the checks were to 

fully compensate plaintiffs for the wage claims. The court commented, ‘The cover letter 

would seem to say it all; however, there is one very curious sentence in the letter that now 

sits near the heart of the pending dispute. In the letter, defense counsel offered that 

“these payments are not conditioned on any settlement or release proposal.” On its face, 

this just means that payments were admittedly owed and defendant was offering the 

money in good faith without quid pro quo. What the letter should have said was that 

plaintiffs’ acceptance and deposit of the funds would be treated as an accord and 

satisfaction for the aforementioned portion of their lawsuit.’ The court also credited 

Bishop’s president’s declaration that he believed the settlement amount was for 

$113,000. It gave plaintiffs the option to either ratify Bishop’s understanding that the 

amount was $113,000, or resume litigation of the claims. 

“About a month later, plaintiffs petitioned this court for a writ of mandate. 

We summarily denied it. Plaintiffs filed a petition for review in the California Supreme 

Court, who granted the petition and transferred the matter back to this court with 

directions to vacate the denial and to issue an alternative writ to the trial court. We 

complied. 

“After further briefing, the trial court modified its order, but essentially 

adopted its initial rationale, this time enforcing the settlement agreement, but granting 

Bishop a credit of $112,000. Our court discharged the alternative writ and dismissed the 
7

initial writ petition. The trial court entered judgment, and plaintiffs appealed.” (Lorta I, 

supra, G059175.)

In September 2021, another panel of this court reversed the judgment and 

instructed the trial court to enter a new judgment in favor of plaintiffs in the amount of 

$225,000 with no credit for the earlier payment of approximately $112,000. (Lorta I, 

supra, G059175.) In February 2022, the trial court entered judgment as ordered by this 

court.

Plaintiffs’ Motion for Attorney Fees

In April 2022, plaintiffs filed a motion seeking $331,261.25 in attorney

fees.

3

These fees were incurred after June 29, 2019, the deadline for Bishop to pay

$225,000 pursuant to the parties’ settlement agreement. Plaintiffs claimed they were 

entitled to fees under sections 1194, 226, and Code of Civil Procedure section 1021.5.

They also argued the fees were not anticipated or released in the settlement agreement.

In opposition, Bishop argued there was no contractual or statutory basis to

award attorney fees. As to the former, Bishop emphasized plaintiffs prevailed on a 

breach of contract claim and “won” their motion to enforce a settlement agreement, 

which stated each party would bear its own attorney fees and costs. As to the relevant 

statutes, Bishop claimed sections 1194, 226, and Code of Civil Procedure section 1021.5 

all require a party to prevail on his or her substantive claims to recover fees. But 

plaintiffs did not prevail on any claims because there was no trial or determination by the 

trial court regarding the merits of plaintiffs’ claims. To the extent plaintiffs prevailed, 

Bishop argued it was on a breach of contract claim arising from the parties’ settlement 

agreement.

3

The attorney fees were based on a lodestar amount of $265,009 and a 

requested multiplier of 1.25. 
8

In November 2022, the court denied plaintiffs’ motion for attorney fees.

The court found plaintiffs sought fees incurred to enforce the parties’ settlement 

agreement, which included the filing of a motion to enforce the settlement, writ 

proceedings, continued litigation in the trial court, and plaintiffs’ appeal of the trial 

court’s second ruling. While plaintiffs prevailed on their interpretation of the settlement

agreement, the court emphasized the agreement stated each party would bear its own fees 

and costs. Finally, the court was not persuaded plaintiffs could recover fees pursuant to 

sections 1194, 226, or Code of Civil Procedure section 1021.5. The court held those 

statutes provide for attorney fees under certain circumstances, “but plaintiffs cite no 

authority holding those circumstances include successfully enforcing a settlement 

agreement reached before adjudication of the substantive merits of plaintiffs’ claims.”

Plaintiffs timely appealed.

DISCUSSION 

Plaintiffs contend the court erred because they prevailed under the relevant 

statutes by obtaining a net monetary recovery in the action. According to plaintiffs, the 

statutes do not require an adjudication of liability. We agree with plaintiffs’ 

interpretation of section 1194, but not section 226 or Code of Civil Procedure section 

1021.5. While the parties’ settlement agreement indicated the parties would bear their 

own attorney fees and costs, it was silent as to any fees incurred after the settlement 

agreement to either continue litigating the action to trial or to enforce the agreement. As 

such, any fees plaintiffs incurred to continue litigating the action are recoverable under 

section 1194. Those post-settlement attorney fees are not expressly barred by the 

settlement agreement. But any fees plaintiffs incurred to enforce the settlement 

agreement are not recoverable as those efforts were governed by the terms of the 

contract. Under the American rule codified in Code of Civil Procedure section 1021,
9

attorney fees incurred to enforce the settlement agreement are not recoverable because 

they are not expressly authorized by the terms of that agreement.

Standard of Review and Applicable Law

We review a denial of attorney fees for an abuse of discretion. (N.S. v.

D.M. (2018) 21 Cal.App.5th 1040, 1053.) We likewise review prevailing party 

determinations for an abuse of discretion. (Arias v. Katella Townhouse Homeowners

Assn., Inc. (2005) 127 Cal.App.4th 847, 852.) But we independently review issues of 

statutory interpretation. (N.S., at p. 1053.) De novo review also “is warranted where the 

determination of whether the criteria for an award of attorney fees and costs . . . have 

been satisfied amounts to statutory construction and a question of law.” (Carver v.

Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.) 

“‘Whether a party to litigation is entitled to recover costs is governed by 

Code of Civil Procedure section 1032, which provides, in subdivision (b), that “[e]xcept 

as otherwise expressly provided by statute, a prevailing party is entitled as a matter of 

right to recover costs in any action or proceeding.”’” (Carver v. Chevron U.S.A., Inc., 

supra, 97 Cal.App.4th at p. 143.) Code of Civil Procedure section 1032 defines 

prevailing party as including “the party with a net monetary recovery, a defendant in 

whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant 

obtains any relief, and a defendant as against those plaintiffs who do not recover any 

relief against that defendant.” (Code Civ. Proc., § 1032, subd. (a)(4), italics added.) 

“Under Code of Civil Procedure section 1033.5, subdivision (a)(10), attorney fees are 

allowable as costs under Code of Civil Procedure section 1032, ‘when authorized by any 

of the following: [¶] (A) Contract. [¶] (B) Statute. [¶] (C) Law.’” (Carver, at p. 143.) 

Here, the parties dispute whether attorney fees are authorized by statute —

namely, section 1194, section 226, and Code of Civil Procedure section 1021.5. Some of 
10

plaintiffs’ claims were based on those statutes. We address each in turn below along with 

the settlement agreement’s attorney fee provision.

Statutory Basis for Attorney Fees

A. Section 1194 

Plaintiffs contend attorney fees are authorized by section 1194 because they 

were prevailing parties under the statute by obtaining a net monetary recovery. (Code 

Civ. Proc., § 1032, subd. (a)(4).) They emphasize Bishop voluntarily paid $112,410.55 

in November 2018 and later paid $225,000 pursuant to the settlement agreement they 

successfully enforced. Plaintiffs point to other cases where courts have allowed the 

recovery of costs after a settlement. (See, e.g., DeSaulles v. Community Hospital of

Monterey Peninsula (2016) 62 Cal.4th 1140, 1154 (DeSaulles) [“The cases make clear 

that if a settlement agreement, compromise offer pursuant to [Code of Civil Procedure] 

section 998, or stipulated judgment is silent on the matter of costs, the plaintiff is not 

barred from seeking costs”]; Folsom v. Butte County Assn. of Governments (1982) 32 

Cal.3d 668, 679 [“absent affirmative agreement of the parties to the contrary, the trial 

court retains jurisdiction after the filing of a compromise agreement to entertain a cost 

bill”].) Bishop disagrees, claiming plaintiffs did not prevail on their statutory claims as 

there was no trial or determination regarding those claims. Instead, Bishop claims 

plaintiffs only prevailed on a breach of contract theory — namely, their interpretation of 

the settlement agreement. While Bishop’s contention is not without some facial appeal, 

we agree with plaintiffs’ interpretation on the prevailing party inquiry.

Our role in construing a statute is to ascertain the intent of the Legislature. 

(Webster v. Appellate Division of Superior Court (2020) 51 Cal.App.5th 676, 680.) “Our 

first step is to scrutinize the words used in the statute and give them a plain and 

commonsense meaning. If the language is clear and unambiguous, there is no need for 

construction or for resort to indicia of the Legislature’s intent. However, the literal 
11

meaning of a statute must be aligned with its purpose. Therefore, the meaning of a 

statute may not be determined from a single word or sentence. The words must be 

construed in context, and provisions relating to the same subject matter or that are part of 

the same statutory scheme must be read together and harmonized to the extent possible.” 

(Bode v. Los Angeles Metropolitan Medical Center (2009) 174 Cal.App.4th 1224, 1236-

1237.) 

Section 1194 “is a ‘one-way’ fee-shifting statute” allowing employees to 

recover attorney fees in a successful action for minimum wage or overtime 

compensation. (Bell v. Farmers Ins. Exchange (2001) 87 Cal.App.4th 805, 829 (Bell).) 

Section 1194 provides: “Notwithstanding any agreement to work for a lesser wage, any 

employee receiving less than the legal minimum wage or the legal overtime 

compensation applicable to the employee is entitled to recover in a civil action the unpaid 

balance of the full amount of this minimum wage or overtime compensation, including

interest thereon, reasonable attorney’s fees, and costs of suit.” (Id., subd. (a), italics 

added.)

Here, the plain language of section 1194 states an employee is entitled “to 

recover in a civil action” the full amount of unpaid minimum wages or overtime 

compensation, including attorney fees. (§ 1194, subd. (a).) The key issue then is whether 

the parties’ settlement agreement constituted a recovery in a civil action within the 

meaning of section 1194. In Bell, supra, 87 Cal.App.4th 805, the court considered this 

language in section 1194 — “to recover in a civil action” — and held it referred “to a 

recovery by judgment.” (Bell, at p. 831.) A judgment is defined as “the final 

determination of the rights of the parties in an action or proceeding.” (Code Civ. Proc., 

§ 577.) The settlement agreement had precisely this effect because it was a final 

determination of the parties’ rights. (Greatorex v. Board of Administration (1979) 91 

Cal.App.3d 54, 58 [“a stipulated judgment is a decision on the merits”].) And a plaintiff 

obtaining a “net monetary recovery” in a settlement can be a prevailing party under Code 
12

of Civil Procedure section 1032, subdivision (a)(4) and therefore able to recover costs, 

which might include attorney fees. (DeSaulles, supra, 62 Cal.4th at p. 1158 [holding a 

plaintiff who is paid money in a favorable settlement obtains a “net monetary recovery” 

within the meaning of Code of Civ. Proc., § 1032].) 

Bishop concedes DeSaulles, supra, 62 Cal.4th 1140 “does hold that a 

plaintiff who obtains a favorable settlement can, in the absence of contract language to 

the contrary, be considered a prevailing party entitled to recover litigation costs . . . .”

But Bishop claims the language of section 1194 “makes clear that [it] require[s] a court 

determination that a violation actually occurred in order to establish any entitlement to 

attorneys’ fees.”

Relying on Bell, supra, 87 Cal.App.4th 805, Bishop argues attorney fees 

under section 1194 are only recoverable after entry of a judgment providing for recovery 

of unpaid minimum wages or overtime compensation. In Bell, the class action plaintiffs 

prevailed on a motion for summary adjudication and moved for an interim award of 

attorney fees under section 1194. (Bell, at pp. 808-809.) The court held section 1194 

could not be applied to award interim attorney fees. (Bell, at p. 833.) In reaching this 

conclusion, the court interpreted the key language in section 1194 — “to recover in a 

civil action” — to mean “a recovery by judgment.” (Bell, at p. 831.) Bell accordingly 

addressed “recovery” in a different context and compared a “judgment” with an “interim” 

nonfinal order. 

Here, while plaintiffs’ recovery was by settlement, it was not an award 

based on an interim ruling. The civil action was complete, and no further issues needed 

to be adjudicated. If a “recovery” under section 1194 does not include money obtained 

via settlement, employees would be disincentivized to settle these claims because they 

would forfeit their statutory right to attorney fees.
13

Bishop’s reliance on Linton v. County of Contra Costa (2019) 31 

Cal.App.5th 628 also is misplaced. In Linton, the court affirmed a denial of statutory fees 

to a plaintiff who had sued under the Unruh Civil Rights Act (Civ. Code, § 51 et seq.)

and the California Disabled Persons Act (Civ. Code, § 54 et seq.) and recovered a 

judgment based on a Code of Civil Procedure section 998 compromise. (Linton, at p. 

631.) The court acknowledged a plaintiff who obtains a judgment pursuant to a section 

998 compromise may be a prevailing party for purposes of costs. (Linton, at p. 632.) But 

where the accepted offer is silent on attorney fees, it supports such an award if “attorney 

fees are authorized by statute or contract.” (Ibid.) The court then noted the Unruh Civil 

Rights Act “only ‘authorizes an award of attorney fees to a person “denied the rights 

provided in [Civil Code] Section 51, 51.5, or 51.6.”’” (Id. at p. 633.) Likewise, the court 

emphasized the California Disabled Persons Act provides that “‘[a]ny person . . . who 

denies or interferes with admittance to or enjoyment of the public facilities . . . or 

otherwise interferes with the rights of an individual with a disability . . . is liable for . . . 

attorney’s fees . . . suffered by any person denied of the rights provided in [Civil Code] 

Sections 54, 54.1, and 54.2.’” (Linton, at p. 634.) The court concluded attorney fees were 

not authorized by the relevant statutes because they required a finding of liability. (Id. at 

pp. 634-635.) 

Unlike the statutes in Linton, section 1194 does not require a finding of 

liability to recover attorney fees. It only states that an employee is entitled “to recover in 

a civil action” the full amount of unpaid minimum wages or overtime compensation, 

including attorney fees. (§ 1194, subd. (a).) A “recovery” of wages “in a civil action” 

under section 1194 includes recovery by settlement.

For the foregoing reasons, the court erred by finding plaintiffs were not 

prevailing parties under section 1194. Even so, we must consider the parties’ settlement 

agreement because plaintiffs can only recover attorney fees in the absence of contract 

language to the contrary. (See DeSaulles, supra, 62 Cal.4th at p. 1158.) Indeed, 
14

plaintiffs concede they can recover statutory attorney fees “unless they were contractual 

[sic] precluded from such a recovery due to the settlement agreement.” (Italics added.) 

We discuss this issue post. 

B. Section 226

Section 226 provides: “An employee suffering injury as a result of a 

knowing and intentional failure by an employer to comply with subdivision (a) is entitled 

to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period 

in which a violation occurs and one hundred dollars ($100) per employee for each 

violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand 

dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.” 

(Id., subd. (e)(1), italics added.)

The statute clearly indicates attorney fees are only available if the employee 

suffered “injury as a result of a knowing and intentional failure by an employer to comply 

with subdivision (a) . . . .” (§ 226, subd. (e)(1).) Because the parties’ settlement 

agreement does not establish these necessary requirements, attorney fees are not 

authorized under section 226.

C. Code of Civil Procedure Section 1021.5

While the unfair competition law does not provide for attorney fees, a 

prevailing plaintiff can seek attorney fees as a private attorney general pursuant to Code 

of Civil Procedure section 1021.5. (Walker v. Countrywide Home Loans, Inc. (2002) 98 

Cal.App.4th 1158, 1179.) Section 1021.5 provides: “Upon motion, a court may award 

attorneys’ fees to a successful party against one or more opposing parties in any action 

which has resulted in the enforcement of an important right affecting the public interest 

if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on 

the general public or a large class of persons, (b) the necessity and financial burden of 
15

private enforcement, or of enforcement by one public entity against another public entity, 

are such as to make the award appropriate, and (c) such fees should not in the interest of 

justice be paid out of the recovery, if any.”

A plain reading of Code of Civil Procedure section 1021.5 indicates 

attorney fees are only allowed if three requirements are met: (1) a significant benefit was 

conferred on the public or large class of people; (2) the necessity and financial burden of 

private enforcement makes the award appropriate; and (3) the attorney fees would not be 

paid out of the recovery. But plaintiffs provide no substantive discussion of the statute. 

Their assertion that they obtained a net monetary recovery also does not address the 

necessary requirements to recover attorney fees under Code of Civil Procedure section 

1021.5. (United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153 

[“We may . . . ‘disregard conclusory arguments that are not supported by pertinent legal 

authority or fail to disclose the reasoning by which [plaintiffs] reached the conclusion 

[they] want[] us to adopt”].) Attorney fees are not authorized under Code of Civil 

Procedure section 1021.5.

The Settlement Agreement’s Attorney Fees Provision

As noted ante, plaintiffs can recover attorney fees under section 1194 

unless they were precluded from such recovery due to the settlement agreement. The 

parties’ settlement agreement states: “Unless otherwise stated herein, each party will 

bear its own attorneys’ fees and court costs.” Given this language, plaintiffs clearly 

cannot recover attorney fees incurred before they entered into the settlement agreement. 

Indeed, they did not try to recover those fees. The key issue is whether they also 

forfeited any right to fees incurred after the settlement agreement. 
16

To the extent plaintiffs engaged in litigation to enforce the settlement 

agreement, those efforts were contractual in nature. In other words, plaintiffs prevailed 

on their interpretation of the settlement agreement, and their right to those attorney fees is 

governed by contract, not section 1194. “Ordinarily, pursuant to the American rule, a 

party must pay for its own attorney fees unless a contract or statute provides authority for 

recovery of attorney fees . . . .” (Mega RV Corp. v. HWH Corp. (2014) 225 Cal.App.4th 

1318, 1337.) Here, the settlement agreement indicates the parties would bear their own 

attorney fees and costs, and the agreement is otherwise silent as to any future fees 

incurred to enforce the agreement. Because the settlement agreement does not explicitly 

authorize attorney fees for any efforts to enforce the agreement or for a breach of the 

agreement, plaintiffs are not entitled to recover those attorney fees.

4

 As Bishop notes, 

this is simply the reality in any breach of contract dispute where the contract does not 

provide for fees. A plaintiff in a breach of contract case will always incur fees, but they 

cannot recover those fees absent a provision providing for fees. (Pellegrini v. Weiss

(2008) 165 Cal.App.4th 515, 534-535; Myers Building Industries, Ltd. v. Interface

Technology, Inc. (1993) 13 Cal.App.4th 949, 975.)

4

Unlike the settlement agreement, the draft long form agreement that 

Bishop never signed allowed the parties to recover attorney fees and costs related to 

enforcement of the agreement. It stated: “[I]n the event any of the Parties shall 

commence any action, motion, or legal proceedings against any other Party to enforce the 

terms of this Agreement, or to declare any rights or obligations under this Agreement, as 

a result of a breach of any covenant or condition . . . , the prevailing Party in any such 

action, motion or proceeding shall be entitled to recover from the losing party its 

attorney’s fees and costs . . . .” 
17

Plaintiffs emphasize they did not only incur fees to enforce the settlement 

agreement because they also engaged in discovery and trial preparation after Bishop

refused to pay under the settlement agreement. To the extent plaintiffs continued 

litigating the case to trial while they simultaneously sought to enforce the settlement,

those attorney fees are recoverable under section 1194. As detailed ante, plaintiffs were 

prevailing parties under section 1194 so they are entitled to their statutory fees unless 

barred by contract. Here, the settlement agreement states the parties would bear their 

own attorney fees and costs, but it is evident the parties contemplated fees and costs 

incurred up to the point of the settlement. The settlement agreement is silent as to 

whether a party can recover statutory fees and costs incurred after the agreement because 

of the other party’s refusal to comply with the settlement. (DeSaulles, supra, 62 Cal.4th 

at p. 1154 [“compromise agreements ‘“regulate and settle only such matters and 

differences as appear clearly to be comprehended in them by the intention of the parties 

and the necessary consequences thereof, and do not extend to matters which the parties 

never intended to include therein, although existing at the time”’”].) Because the 

settlement agreement does not contractually bar the recovery of post-settlement statutory 

fees, the court erred by denying those fees. On remand, the court should determine the 

amount of reasonable attorney fees incurred by plaintiffs to litigate the action after June 

29, 2019. If feasible, the court also may consider whether to apportion fees to any

section 1194 causes of action. To be clear, the recoverable fees do not include attorney 

fees plaintiffs incurred to enforce the settlement agreement.

DISPOSITION

The postjudgment order denying plaintiffs’ motion for attorney fees is 

reversed, and the matter is remanded to the trial court to conduct additional proceedings 

to determine the amount of reasonable attorney fees plaintiffs are entitled to receive. 

Those attorney fees include fees plaintiffs incurred to litigate the action after June 29, 
18

2019, but they do not include attorney fees incurred to enforce the settlement agreement, 

which are not recoverable. If feasible, the court may consider whether to apportion fees 

to any section 1194 causes of action. Plaintiffs to recover costs on appeal. 

SANCHEZ, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

GOODING, J.