Filed 12/5/23 Schwade v. South Pasadena Rehabilitation Center CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

PATRICIA SCHWADE,

Plaintiff and Appellant,

v.

SOUTH PASADENA 

REHABILITATION CENTER, LLC

et al.,

Defendants and Respondents.

 B318644

 (Los Angeles County

 Super. Ct. No.

 BC694824)

APPEAL from an order of the Superior Court of 

Los Angeles County, Amy D. Hogue, Judge. Reversed.

Matern Law Group, Matthew J. Matern, Kiran Prasad, 

Mikael H. Stahle and Irina A. Kirnosova for Plaintiff and 

Appellant.
2

Munger, Tolles & Olson, Joseph D. Lee, Margaret G. 

Maraschino and Jessica O. Laird for Defendants and 

Respondents.

______________________________

Plaintiff and appellant Patricia Schwade (Schwade) 

brought this action against defendants and respondents South 

Pasadena Rehabilitation Center, LLC; Brius Management Co.; 

Brius, LLC; and Shlomo Rechnitz (collectively respondents) 

alleging various Labor Code violations, including claims for the 

nonpayment of wages (wage claims). Following a successful 

motion for summary judgment, respondents sought to recover 

their costs. Schwade moved to strike or tax those costs. The trial 

court denied Schwade’s motion, and Schwade appeals.

We agree with Schwade that the trial court erred. Under 

Labor Code section 218.5, subdivision (a),1 respondents are 

prohibited from recovering costs incurred defending Schwade’s 

wage claims. Because Schwade’s wage claims are inextricably 

intertwined with her nonwage claims, respondents are not 

entitled to recover any costs. Accordingly, we reverse.

BACKGROUND

I. Schwade’s Claims Against Respondents

In the operative first amended complaint, Schwade alleged 

that she had been employed by numerous parties, including 

respondents. She asserted individual and class claims under the 

Labor Code against respondents for the failure to provide 

1 All further statutory references are to the Labor Code 

unless otherwise indicated.
3

required meal periods, failure to provide required rest periods,

failure to pay overtime wages, failure to pay minimum wages,

failure to pay timely wages during employment, failure to pay all 

wages due to discharged and quitting employees, failure to 

furnish accurate itemized wage statements, failure to maintain 

required records, and failure to indemnify employees for 

necessary expenditures incurred in discharge of duties. Schwade 

also alleged unfair and unlawful business practices under the 

Business and Professions Code.

II. Respondents’ Motion for Summary Judgment

Respondents moved for summary judgment on the ground 

that they were not Schwade’s employer. The trial court granted 

the motion, finding it undisputed that respondents did not 

employ Schwade. The court subsequently entered judgment in 

respondents’ favor.2

III. Respondents’ Memorandum of Costs; Schwade’s Motion to 

Strike or Tax Costs

Respondents filed a memorandum of costs seeking a total of 

$11,937.63. In response, Schwade moved to strike or tax 

respondents’ costs. She argued, inter alia, that recovery of 

respondents’ costs was barred under sections 218.5 and 1194.

3

Respondents opposed the motion.

2 Schwade appealed from the judgment, and we affirmed. 

(Schwade v. South Pasadena Rehabilitation Center LLC (Feb. 28, 

2023, B314052) [nonpub. opn.].)

3 Section 1194, subdivision (a), allows a prevailing employee 

to recover attorney fees and costs in actions for minimum wage 

violations and unpaid overtime.
4

IV. Trial Court’s Order

After entertaining oral argument, the trial court denied 

Schwade’s motion to strike or tax costs. The court found that 

respondents’ claimed costs were facially proper, that statutory 

exceptions did not bar respondents’ recovery of costs, and that 

respondents had not waived their right to recover costs.

The trial court addressed whether sections 218.5 and 1194 

barred respondents from recovering their costs. It noted that two 

of Schwade’s causes of action—failure to pay timely wages and 

failure to pay all wages due—“were ‘for the nonpayment of wages’ 

within the meaning of section 218.5[.]” Finding “no evidence” 

that the causes of action were brought in bad faith, the court 

concluded that, under section 218.5, respondents could not 

“recover costs incurred defending against” those claims.

The trial court also found that respondents were barred 

from recovering costs pursuant to section 1194 for another two of 

Schwade’s causes of action—failure to provide overtime wages 

and failure to provide minimum wages.

But, the remaining six causes of action “were neither 

‘actions[s] brought for the nonpayment of wages’ within the 

meaning of section 218.5, nor actions to recover minimum wages 

or overtime compensation within the meaning of section 1194.”

Thus, the trial court had to decide “how to award costs to a party 

entitled to costs for some, but not all, of the claims on which it 

prevailed.” To answer this question, the court turned to Cruz v. 

Fusion Buffet, Inc. (2020) 57 Cal.App.5th 221, 235 (Cruz), which 

addressed “[a] somewhat analogous situation . . . with attorney’s 

fees”: “‘Where a plaintiff has alleged multiple causes of action 

and is statutorily entitled to fees with respect to only one or fewer 

than all of the claims,’ the trial court can ‘apportion’ the claimed 
5

fees between time spent litigating successful claims and time 

spent litigating unsuccessful claims. [Citation.] A court need 

not, however, apportion fees ‘between claims for which statutory 

fees are available and those for which they are not’ if the claims 

are ‘intertwined,’ that is, they ‘involve either common factual 

issues or legal issues.’ [Citation.]”

Ultimately, the trial court determined that all of Schwade’s 

claims were intertwined. Because the claims were intertwined

and respondents were “entitled, under [Code of Civil Procedure

section 1032, subdivision (b)’s] general cost statute, to recover 

their costs defending” the six causes of action for which costs 

were not statutorily barred, the court denied Schwade’s motion to 

strike or tax costs in its entirety.

V. Appeal

Schwade timely appealed from the trial court’s order

denying her motion to strike or tax costs.

DISCUSSION

I. Standards of Review

We generally review the denial of a motion to strike or tax 

costs for abuse of discretion. (Coastline JX Holdings LLC v. 

Bennett (2022) 80 Cal.App.5th 985, 1013.) The trial court’s 

discretion, however, “is limited by the applicable legal principles.” 

(People ex rel. Dept. of Corporations v. SpeeDee Oil Change 

Systems, Inc. (1999) 20 Cal.4th 1135, 1144; see also People v. 

Grimes (2016) 1 Cal.5th 698, 712, fn. 4 [abuse of discretion 

standard of review “is not designed to insulate legal errors from 

appellate review”].)

“Interpreting a statute is . . . a matter of law, which we 

review de novo. [Citation.]” (Chaaban v. Wet Seal, Inc. (2012) 

203 Cal.App.4th 49, 52.) “The goal of statutory interpretation is 
6

to ‘ascertain the intent of the Legislature so as to effectuate the 

law’s purpose. [Citation.]’ [Citation.] If a statute is clear and 

unambiguous, the obvious meaning must ordinarily be accepted. 

[Citation.]” (Broadcast Music, Inc. v. Structured Asset Sales, LLC

(2022) 75 Cal.App.5th 596, 604–605.)

II. Relevant Cost-Shifting Statutes

Code of Civil Procedure section 1032, subdivision (b)—“the 

general cost-recovery statute” (Murillo v. Fleetwood Enterprises, 

Inc. (1998) 17 Cal.4th 985, 996)—“provides that civil defendants 

are ‘entitled as a matter of right’ to recover their costs ‘[e]xcept as 

otherwise expressly provided by statute.’” (Williams v. Chino 

Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 104.)

Section 218.5 provides one such statutory prohibition to a 

nonemployee-defendant’s recovery of costs. It provides, in 

relevant part: “In any action brought for the nonpayment of 

wages, fringe benefits, or health and welfare or pension fund 

contributions, the court shall award reasonable attorney’s fees 

and costs to the prevailing party if any party to the action 

requests attorney’s fees and costs upon the initiation of the 

action. However, if the prevailing party in the court action is not 

an employee, attorney’s fees and costs shall be awarded pursuant 

to this section only if the court finds that the employee brought 

the court action in bad faith.” (§ 218.5, subd. (a).) Thus, in 

actions for the nonpayment of wages, section 218.5 “prohibits a 

prevailing party [alleged] employer from recovering attorney fees 

[and costs] unless the trial court finds the employee brought the 

wage claim in bad faith.” (Dane Elec Corp., USA v. Bodokh 

(2019) 35 Cal.App.5th 761, 764 (Dane Elec).)
7

III. Analysis

There is no dispute that respondents were the prevailing 

parties as to each cause of action asserted against them. (Code 

Civ. Proc., § 1032, subd. (a)(4) [“‘[p]revailing party’ includes . . . a 

defendant as against those plaintiffs who do not recover any 

relief against that defendant”].) Thus, they are entitled to costs 

under Code of Civil Procedure section 1032, subdivision (b), 

unless another statute provides an express exception to this 

entitlement. Section 218.5 does just that for two of Schwade’s 

causes of action: failure to timely pay wages and failure to pay 

all wages due. (See § 218.5, subd. (a) [“In any action brought for 

the nonpayment of wages . . .”]; Kirby v. Immoos Fire Protection, 

Inc. (2012) 53 Cal.4th 1244, 1256 [holding that “an ‘action 

brought for nonpayment of wages’” within the meaning of 

section 218.5 “is an action brought on account of nonpayment of 

wages”].) As the trial court correctly found, respondents were not 

entitled to recover costs for those two causes of action because 

(1) they were not the “employee,” and (2) Schwade did not bring 

this action in bad faith. (§ 218.5, subd. (a).)

Although the trial court correctly determined that 

section 218.5 prohibited respondents from recovering costs 

incurred defending against Schwade’s wage claims, it 

nevertheless concluded that it had the discretion to award 

respondents all their claimed costs under Code of Civil Procedure 

section 1032.

In reaching this conclusion, the trial court relied on Cruz, 

supra, 57 Cal.App.5th at page 235, which held: “Where a 

plaintiff has alleged multiple causes of action and is statutorily 

entitled to fees with respect to only one or fewer than all of the 

claims, the trial court can apportion the attorney fees. [Citation.] 
8

However, . . . attorney fees need not be apportioned between 

claims for which statutory fees are available and those for which 

they are not where the claims involve either common factual 

issues or legal issues. [Citations.]” (See also Reynolds Metals Co. 

v. Alperson (1979) 25 Cal.3d 124, 129–130 [“Attorney’s fees need

not be apportioned when incurred for representation on an issue 

common to both a cause of action in which fees are proper and 

one in which they are not allowed”].)

In other words, the trial court found all of Schwade’s claims 

intertwined, applied Cruz, and then awarded respondents all of 

their claimed costs.

This was error; the trial court’s reliance upon Cruz was 

misplaced because Cruz is readily distinguishable. In Cruz, the 

Court of Appeal found no abuse of the trial court’s discretion in 

declining to apportion an award of attorney fees to an employeeplaintiff where claims for which fees were recoverable were 

inextricably intertwined with claims for which there was no 

statutory basis for fees. (Cruz, supra, 57 Cal.App.5th at pp. 235–

236.) Here, in contrast, the trial court awarded all claimed costs 

to respondents, who are not the employee-plaintiff.

This distinction is critical in light of the public policies at 

stake. Dane Elec, supra, 35 Cal.App.5th 761 is instructive. In 

that case, an employer prevailed on a complaint against an 

employee to recover on a promissory note and defeated the 

employee’s cross-complaint to recover allegedly unpaid wages. 

(Id. at p. 764.) The trial court granted the employer’s “motion to 

recover attorney fees based on an attorney fees provision in the 

promissory note. The court found that [the employee] had not 

brought the wage claim in bad faith and declined to award [the 

employer] attorney fees incurred solely in connection with the 
9

wage claim. But the court awarded [the employer] attorney fees 

incurred in defending [the employee’s] wage claim that were 

inextricably intertwined with the contract claim.” (Ibid.)

The Court of Appeal reversed the order granting the 

employer’s motion for attorney fees. (Dane Elec, supra,

35 Cal.App.5th at p. 764.) It observed that, “[a]lthough 

section 218.5[, subdivision ](a) is a two-way fee-shifting statute 

[citation], it has the potential to become a one-way or unilateral 

fee-shifting provision if . . . the trial court finds a plaintiff did not 

bring the wage claim in bad faith. Courts have uniformly 

recognized that such unilateral fee-shifting statutes ‘reflect a 

considered legislative judgment that prevailing defendants 

should not receive fees.’ [Citation.]” (Dane Elec, supra, at 

p. 773.)4

The Dane Elec court then turned to the legislative history 

of section 218.5, subdivision (a), specifically the addition by 

Senate Bill No. 462 (2013-2014 Reg. Sess.) of the sentence 

permitting a prevailing nonemployee to recover attorney fees and 

costs only upon a finding that the wage claim was brought in bad 

faith. (Dane Elec, supra, 35 Cal.App.5th at p. 773.)5 The court 

4 A “two-way” fee and cost-shifting statute awards attorney 

fees and costs under delineated circumstances to either the 

plaintiff or the defendant. In contrast, a “one-way” fee and costshifting statute restricts the recovery of fees and costs to only one 

side of a lawsuit.

5 “Prior to 2014, section 218.5 did not distinguish between 

prevailing employers and employees. It was a true ‘two way’ fee 

shifting statute that awarded fees to the winner, whether 

employee or employer. [Citation.]” (USS-Posco Industries v. 

Case (2016) 244 Cal.App.4th 197, 216.)
10

quoted the following “analysis by the Assembly Committee on the 

Judiciary set[ting] forth the following policy for the legislation: 

‘This bill would clarify the existing two-way fee[-]shifting 

provision of section 218.5 by expressly providing that where the 

prevailing party is a non-employee (e.g., the employer), fees are to 

be awarded upon a judicial finding that the employee brought the 

action in bad faith. The reason for a higher standard of course is 

that wage laws reflect a fundamental policy of the state, the 

vindication of which is largely left to employees. The premise of 

this bill is that the great expense and unpredictability of 

exposure to attorney’s fees liability is likely to chill the pursuit of 

potentially valid claims by employees of limited means, contrary 

to the important policy objectives of the statutory scheme.’ 

[Citation.]” (Dane Elec, supra, at p. 773.) The court emphasized

that “[t]he policy expressed by the Assembly Committee on the 

Judiciary—to encourage employees to effectively enforce the 

wage laws—is described as both ‘fundamental’ and ‘important.’” 

(Id. at p. 774.)

Concluding “that to permit a prevailing defendant . . . to 

recover attorney fees incurred in defending a wage claim, which 

the trial court has determined not to have been brought in bad 

faith, would frustrate the Legislature’s intent by turning a 

unilateral fee-shifting statute into a reciprocal one[,]” the 

Dane Elec court held “that unless the trial court finds the wage 

claim was brought in bad faith, section 218.5[, subdivision ](a)[,] 

prohibits, as a matter of law, an award of attorney fees to a 

prevailing party for successfully defending a wage claim that 

overlaps with claims subject to a contractual prevailing party 

attorney fees provision.” (Dane Elec, supra, 35 Cal.App.5th at 

p. 774.)
11

The Dane Elec court found further support in cases 

concerning the interplay of other fee and cost-shifting statutes. 

(See Dane Elec, supra, 35 Cal.App.5th at pp. 774–775; Roman v. 

BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1062 (Roman) 

[“Government Code section 12965, subdivision (b)’s exception to 

the mandatory award of litigation costs under [Code of Civil 

Procedure] section 1032, subdivision (b), implements a clear 

legislative goal of encouraging potentially meritorious [Fair 

Employment and Housing Act (FEHA)] suits”]; Turner v. 

Association of American Medical Colleges (2011) 193 Cal.App.4th 

1047, 1054 (Turner) [“When the Legislature enacted the 

unilateral, ‘prevailing plaintiff’ fee-shifting provisions in [Civil 

Code] sections 52 and 54.3, it created an exception to [Civil Code] 

section 55 by implication, prohibiting a fee award to a prevailing 

defendant for the same hours devoted to defending claims under 

[Civil Code] sections 52 and 54.3”].) “A fair reading of Turner and 

Roman is that, when necessary to vindicate an express public 

policy, a specific fee-shifting statute will control over a general 

statutory provision awarding attorney fees or costs to a 

prevailing party.” (Dane Elec, supra, at p. 775.)

Following the reasoning of Dane Elec, we conclude that

section 218.5 controls over the general cost-recovery statute and 

prohibits, as a matter of law, the cost award here to a 

nonemployee prevailing party, where the wage and nonwage 

claims are inextricably intertwined, and the trial court expressly 

found no evidence that the wage claims had been brought in bad 

faith. (See Dane Elec, supra, 35 Cal.App.5th at p. 775

[“section 218.5[, subdivision ](a), a specific fee-shifting statute 

vindicating an express public policy, controls over general 

statutes governing contract-based attorney fees”].) To hold 
12

otherwise would run counter to the legislative goal of 

encouraging employees to bring potentially meritorious actions to 

enforce wage laws. (See Dane Elec, supra, at pp. 773–774.)

Contrary to respondents’ contention, this legislative intent 

is still advanced in the instant case even though Schwade’s 

claims were ultimately unsuccessful. We disagree with 

respondents that the interpretation of section 218.5 adopted here 

will “encourage[] meritless suits by plaintiffs against nonemployers.” Under the plain language of section 218.5, if a trial 

court finds that a plaintiff has brought wage claims in bad faith, 

the plaintiff is liable for the prevailing nonemployee-defendant’s 

attorney fees and costs incurred in defending those claims.

Respondents also argue that section 218.5’s exception to

the general cost-recovery statute is limited to Schwade’s wagerelated claims. As a general matter, we do not disagree. (See 

Ramos v. Garcia (2016) 248 Cal.App.4th 778, 786 [“In the 

application of section 218.5, subdivision (b), the term ‘any action’ 

refers to any cause of action”].) But here, because the wage 

claims are inextricably intertwined with the nonwage claims,6

ordering Schwade to pay all of respondents’ claimed costs 

necessarily charges her for costs incurred defending wage claims

not found to have been brought in bad faith. This is not 

permitted under section 218.5.

6 Respondents concede that the claims are intertwined. In 

the briefing below and on appeal, neither party has suggested

that costs for defending the wage claims can be divided from 

those incurred defending the nonwage claims.
13

Because section 218.5 bars respondents’ recovery of costs in 

this action, we need not address whether costs are also barred 

under section 1194 or any other statute.

DISPOSITION

The order is reversed. Schwade is entitled to her costs on 

appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_____________________, Acting P. J.

ASHMANN-GERST

We concur:

________________________, J.

CHAVEZ

________________________, J.

HOFFSTADT