Court Opinion

ID: 9926925
Source: CourtListenerOpinion
Date Created: 2024-01-25 22:02:23.812354+00
Date Added: 2024-06-11T09:23:30.410482
License: Public Domain

Filed 1/25/24 Wu v. ABC Lucky Transportation CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not been certified for publication or ordered published for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

                      SECOND APPELLATE DISTRICT

                                    DIVISION ONE

 TAO WU,                                                          B323494, B326800

          Plaintiff and Appellant,                                (Los Angeles County
                                                                  Super. Ct. No. 20PSCV00512)
          v.

 ABC LUCKY TRANSPORTATION,
 INC., et al.,

          Defendants and Respondents.

      APPEAL from a judgment and order of the Superior Court
of Los Angeles County, Peter A. Hernandez, Judge. Affirmed.
      Law Offices of Steve Qi & Associates, Steve Qi, Steven
Sugars, Zixuan Zhou for Plaintiff and Appellant.
      Law Office of Helen Wong, Helen Wong for Defendants and
Respondents.
              ___________________________________
      Tao Wu sued his employer and its alleged alter ego for
Labor Code violations, including unpaid overtime wages. He
accepted defendants’ Code of Civil Procedure section 998
settlement offer, which provided that judgment would be
entered against the employer in exchange for $35,000 but did
                                                             1
not specifically reference the employer’s alleged alter ego.
After the court dismissed the employer but not its alter ego
from the action, the alter ego moved to dismiss himself as
well, contending the section 998 offer resolved the lawsuit as
to both defendants. The trial court agreed, dismissed the alter
ego, and awarded Wu $10,000 in attorney fees as authorized
by the Labor Code for an action for unpaid wages.
      Wu contends the court misinterpreted the section 998
offer as applying to both defendants and abused its discretion
in awarding only $10,000 in attorney fees. We disagree with
both contentions, and thus affirm the dismissal judgment and
attorney fee order.
                         BACKGROUND
A.    Settlement Offer
      Wu was employed as a driver by ABC Lucky
Transportation, Inc. (ABC) and its owner and alleged alter ego,
Huilong Lai.
      He filed a complaint against ABC and Lai, alleging he “was
employed by Defendants ABC Lucky and Lai (collectively
‘Employer’), and each of them, as a driver . . . .” Wu alleged that
both “employer” and “Defendants, and each of them” violated
various Labor Code provisions by failing to pay overtime wages,

      1
        Undesignated statutory references will be to the Code of
Civil Procedure.

                                 2
provide rest and meal periods, timely pay wages upon
termination, and provide complete and accurate wage
statements. Wu also alleged he was wrongfully terminated after
requesting overtime wages. Wu asserted eight causes of action,
including one for failure to pay overtime wages in violation of
Labor Code sections 221, 223 and 510. Among other damages, he
sought $10,561.70 in unpaid overtime pay.
       In paragraph 14 of the complaint Wu alleged Lai was
ABC’s alter ego, as follows:
       “ALTER EGO: Plaintiff is informed and believes and
therefore alleges that Defendant ABC Lucky, . . . at all times
herein mentioned, was alter ego of Defendant Lai. Plaintiff is
informed and believes, and thereon alleges that there exists, . . .
at all times mentioned herein, a unity of interest and ownership
between Defendant ABC Lucky and Defendant Lai, such that any
individuality and separateness between the individual Defendant
Lai and the business entity Defendant ABC Lucky have ceased.
Defendant Lai has at all times exercised control and dominion
over Defendant ABC Lucky with a disregard for the separate
legal status of the entity in an attempt to defraud Plaintiff.
Adherence to the separate existence of Defendant ABC Lucky as
separate entities distinct and separate from Defendant Lai would
permit an abuse of the corporate privilege and would sanction
fraud and promote injustice.”
       On February 8, 2022, Wu moved for summary judgment,
arguing that Lai was his joint employer as the Industrial Wage
Commission defines that position. The motion never came on for
hearing.
       Defendants offered to settle the case once before Wu moved
for summary judgment and three times afterward.

                                 3
      On February 28, 2022, defendants’ counsel, Helen Wong,
sent Wu a fifth settlement offer, this one pursuant to section 998,
which provided: “Defendants make the offer as follows: [¶]
Judgment in the amount of $35,000.00 against Defendant ABC
Lucky Transportation, Inc., and in favor of Plaintiff Tao Wu.
This Judgment is in addition to the costs and reasonable
attorney’s fees that may be claimed by [Wu] . . . .”
      Wu accepted the offer and the court dismissed ABC from
the action.
      Lai thereafter moved to dismiss the action against himself
as well on the ground that the section 998 offer resolved the
entire case as to both defendants. This was so, Lai argued
(incorrectly) because Wu alleged no separate cause of action
against Lai, but alleged only that Lai was ABC’s alter ego. Lai
argued that “[t]he alter ego allegations in paragraph 14 are the
only allegations pertaining to [Lai] in the entire Complaint.
The[r]e is no allegation of any wrongdoing by [Lai] individually.”
Lai argued that as an alter ego defendant, he had no separate
primary liability to Wu. (However, as noted above, Wu alleged
that Lai was both ABC’s alter ego and Wu’s joint employer.)
      Lai supported his motion with Wong’s declaration. In it,
she stated that before the February 28, 2022 section 998 offer,
“defendants” had made four settlement offers to Wu, on January
14 and February 22 and 24 (twice), 2022. Wong declared Wu
could not have understood the section 998 offer to apply only to
ABC because the offer was “much more generous than all prior
settlement offers made by Defendants.”
      Wu opposed the motion, arguing the offer resolved the case
only as to ABC, not Lai. He argued (correctly) that he alleged

                                 4
that Lai was not only ABC’s alter ego but also his (Wu’s) joint
employer.
       Wu supported his opposition with a declaration from his
counsel to the effect that counsel understood defendants’ section
998 offer to apply only to ABC. Counsel declared this
understanding was based both on the plain language of the offer
and on his impression that Lai, as an individual defendant,
probably believed he could prevail, where ABC could not, because
it is much harder to prove that an individual is an alter ego of a
corporate defendant, or a joint employer, than it is to refute clear
evidence of an admitted corporate employer’s Labor Code
violations.
       The trial court found that defendants’ section 998 offer was
“not ambiguous and not reasonably susceptible to more than one
interpretation.” It found that notwithstanding the offer’s specific
reference to judgment against ABC, and failure to reference Lai,
the offer by its “plain meaning” applied to both ABC and Lai
because it was made by “defendants,” plural. (The court made no
mention of counsels’ declarations.)
       The court therefore granted defendants’ motion and
ordered Lai dismissed.
       Wu appeals from the resulting judgment of dismissal.
B.     Attorney Fees
       In later proceedings, Wu sought $64,502.50 in attorney fees
on his cause of action for unpaid overtime, multiplied by two due
to the contingent nature of the litigation, plus $4,550.76 in costs,
for a total of $133,555.76. Defendants opposed the request in
part, arguing it was inflated. In support of defendants’
opposition, Wong, their counsel, declared that (1) Wu’s overtime
claim was easily provable on undisputed facts, as he always

                                 5
possessed his timesheets, which in any event defendants had also
produced early in the litigation, and (2) Wu’s summary judgment
motion was unnecessary because defendants were positioned to
settle the litigation even before that motion was filed.
       The court found that Wu’s counsel’s rates were reasonable
but the time spent on Wu’s overtime claim was not, as this claim
constituted only one of eight causes of action. The court found
that no multiplier would be appropriate, and awarded Wu only
$10,000 in attorney fees and $2,291.20 in costs.
       Wu separately appeals from this order, contending the
court abused its discretion in awarding only $10,000 in attorney
fees.
       We consolidated the appeals.
                           DISCUSSION
A.     Defendants’ Section 998 Offer Applied to both ABC
       and Lai
       Wu contends defendants’ section 998 offer pertained only to
ABC, not Lai. We disagree.
       Section 998 provides that “[n]ot less than 10 days prior to
commencement of trial . . . , any party may serve an offer in
writing upon any other party to the action to allow judgment to
be taken or an award to be entered in accordance with the terms
and conditions stated at that time.” (§ 998, subd. (b).)
       A section 998 offer is governed by principles generally
applicable to contracts. (Goodstein v. Bank of San Pedro (1994)
27 Cal.App.4th 899, 907.) The fundamental goal of contractual
interpretation is “to give effect to the mutual intention of the
parties.” (Civ. Code, § 1636.) If contractual language is
unambiguous, it governs. (Civ. Code, § 1638.)

                                6
       An offer to compromise is ambiguous if it is capable of two
or more reasonable constructions. (See Powerine Oil Co., Inc. v.
Superior Court (2005) 37 Cal.4th 377, 390 (Powerine).) The
language must be construed in the context of the instrument as a
whole, and in the circumstances of the case. If an ambiguity is
not eliminated by the language and context, it is generally
construed against the party that caused the uncertainty to exist.
(Id. at p. 391.)
       “Interpretation of a written document where extrinsic
evidence is unnecessary is a question of law . . . . [Citation.]
When the meaning of contractual language is doubtful or
uncertain and parol evidence is introduced to aid in its
interpretation, the meaning of the contract is a question of fact.”
(Horsemen’s Benevolent & Protective Assn. v. Valley Racing Assn.
(1992) 4 Cal.App.4th 1538, 1559.) In such a case, a “contract may
be explained by reference to the circumstances under which it
was made, and the matter to which it relates” (Civ. Code, § 1647),
and “evidence of consistent additional terms” may be admitted to
explain or supplement the terms set forth in the writing (Code
Civ. Proc., § 1856, subd. (b)). In other words, even when
contractual language appears to be clear, context matters.
       However, extrinsic evidence may not be admitted to give an
instrument a meaning to which it is not reasonably susceptible.
(United States Leasing Corp. v. duPont (1968) 69 Cal.2d 275, 284;
see LaCount v. Hensel Phelps Constr. Co. (1978) 79 Cal.App.3d
745 [evidence of custom and usage of words in a certain trade is
inadmissible to vary terms of a contract].) “Parol evidence is
admitted where uncertainty exists as to the meaning of a
contract to show what the parties meant by what they said, but it
is not admitted to show that they meant something other than

                                 7
what they said.” (Rilovich v. Raymond (1937) 20 Cal.App.2d 630,
639.)
       In the absence of any conflicting extrinsic evidence,
interpretation of a section 998 offer is a question of law that we
review de novo. (See In re Marriage of Assemi (1994) 7 Cal.4th
896, 911.) When extrinsic evidence is admitted to interpret
contract language, we review a trial court’s ruling for substantial
evidence. (Ibid. [factual determinations made by a trial court on
a motion to enforce a settlement must be affirmed if the trial
court’s factual findings are supported by substantial evidence].)
       Here, defendants’ section 998 offer was capable of two
reasonable constructions. On the one hand, the offer expressly
stated that judgment would be entered against ABC, and said
nothing about Lai. Pursuant to this facially plain language,
defendants offered to accept judgment only against ABC.
       However, this language “must be construed in the context
of that instrument as a whole, and in the circumstances of that
case.” (Powerine, supra, 37 Cal.4th at p. 391.)
       Three such circumstances are pertinent. First, that the
offer was made by “defendants” suggests it applied to both ABC
and Lai, as Lai would have no authority as a defendant to make
an offer on behalf of ABC. As a defendant, Lai could act only for
himself.
       Second, defendants have one counsel, Wong, who made four
settlement offers to Wu on behalf of “defendants” before the
section 998 offer. The record thus suggests that ABC and Lai
litigated their defenses jointly, and nothing suggests the defenses
were separate. Wu adduces no circumstance (other than the
language of the offer) suggesting that defendants were disunified
in their defense of this action.

                                 8
       Third, Wong appeared to have been under the impression
that Wu alleged only an alter ego theory of liability against Lai.
Although this was incorrect—as Wu also alleged joint employer
liability—Wong’s misunderstanding suggests that ABC and Lai
believed they were positioned in this litigation as a unified alter-
ego-corporation entity, as Wong (mis)understood Wu alleged, and
therefore would be treated as unified for purposes of settlement.
       The language and circumstances thus created an ambiguity
by suggesting that defendants’ intention varied from the
language in their section 998 offer. The circumstances further
suggested that despite what defendants said, Wu knew what they
meant.
       Considering not only the language of the offer but also its
context, the trial court was therefore entitled to find that
defendants intended their section 998 offer to apply to both ABC
and Lai notwithstanding its reference only to ABC, and that Wu
knew of this intention, and by accepting the offer acceded to it.
       Although the court mistakenly found the language of the
section 998 offer to be unambiguous, this finding was apparently
grounded on the court’s opinion that the circumstances
accompanying the language made the parties’ intent so obvious as
to be unambiguous. We need not decide whether the court was
right in this respect; it suffices that the court’s ultimate
interpretation of the offer was supported by the record.
       Wu argues that the trial court impermissibly ignored his
counsel’s declaration. We disagree. Although the court did not
mention Wu’s counsel’s declaration in its order and, as discussed
above, erroneously found defendants’ section 998 offer to be
unambiguous, nothing suggests the court ignored counsel’s
declaration.

                                 9
       We will therefore affirm the judgment of dismissal.
B.     Attorney Fees
       Wu contends the trial court abused its discretion by
awarding only $10,000 in attorney fees for his overtime claim.
We disagree.
       1.     Applicable Law
       A prevailing employee is entitled to recover “reasonable
attorney’s fees” relating to claims for unpaid wages. (See Lab.
Code, § 218.5, subd. (a), Code Civ. Proc., § 1194, subd. (a).)
       A trial court has broad authority to determine the amount
of reasonable attorney fees. (PLCM Group, Inc. v. Drexler (2000)
22 Cal.4th 1084, 1095.) “[T]he primary method for establishing
the amount of ‘reasonable’ attorney fees is the lodestar method.
The lodestar (or touchstone) is produced by multiplying the
number of hours reasonably expended by counsel by a reasonable
hourly rate.” (Lealao v. Beneficial California, Inc. (2000) 82
Cal.App.4th 19, 26 (Lealao).) Once the trial court has fixed the
lodestar, “it shall consider whether the total award so calculated
under all of the circumstances of the case is more than a
reasonable amount and, if so, shall reduce the [Civil Code]
section 1717 award so it is a reasonable figure.” (Sternwest Corp.
v. Ash (1986) 183 Cal.App.3d 74, 77.) The lodestar may be
adjusted at the discretion of the trial court “after consideration of
a number of factors, including the nature of the litigation, its
difficulty, the amount involved, the skill required in its handling,
the skill employed, the attention given, the success or failure, and
other circumstances in the case.” (Melnyk v. Robledo (1976) 64
Cal.App.3d 618, 623-624.)
       A court also has broad discretion to apportion fees among
causes of action (see Cruz v. Fusion Buffet, Inc. (2020) 57

                                 10
Cal.App.5th 221, 235; Reynolds Metals Co. v. Alperson (1979) 25
Cal.3d 124, 129), even where the issues are connected, related or
intertwined (El Escorial Owners’ Assn. v. DLC Plastering, Inc.
(2007) 154 Cal.App.4th 1337, 1365). In exercising this discretion,
the court need not apportion fees where claims are so intertwined
that separation of time is “impracticable, if not impossible” to
achieve. (Abdallah v. United Sav. Bank (1996) 43 Cal.App.4th
1101, 1111.)
      We review an attorney fee award for abuse of discretion.
(Lealao, supra, 82 Cal.App.4th at p. 25.) “ ‘ “The appropriate test
for abuse of discretion is whether the trial court exceeded the
bounds of reason. When two or more inferences can reasonably
be deduced from the facts, the reviewing court has no authority to
substitute its decision for that of the trial court.” ’ ” (Goodman v.
Lozano (2010) 47 Cal.4th 1327, 1339.)
      The “ ‘ “experienced trial judge is the best judge of the value
of professional services rendered in his court . . . .” ’ ” (Chavez v.
Netflix, Inc. (2008) 162 Cal.App.4th 43, 64.) Even if he or she did
not preside over the trial, a trial judge has a unique familiarity
with the value of services in the community and the skill and
time commitments necessary to litigate specific types of cases.
Thus, “ ‘ “while [the trial judge’s] judgment is of course subject to
review, it will not be disturbed unless the appellate court is
convinced that it is clearly wrong.” ’ ” (Ibid.)
      2.      Application
      Here, Wu was entitled to attorney fees only as to one of his
eight causes of action, for unpaid overtime in the amount of
$10,561.70. That claim presented factual and legal issues both
common with and discrete from Wu’s other claims, e.g., for
missed meal and rest breaks or wrongful termination, and was

                                 11
provable based on calculations derived from documents Wu
possessed early in the litigation. Considering the nature of the
litigation, difficulty of proving Wu’s overtime claim, the presence
of discrete factual and legal issues (especially as to Wu’s wrongful
termination claim), and the amount involved, $10,561.70, we
conclude the trial court acted within its discretion in denying
Wu’s request for a lodestar multiplier and determining that
$10,000 was a fair attorney fee award.
       Wu argues that all eight of his causes of action were closely
intertwined, requiring evaluation of evidence relating to the days
and hours plaintiff worked and his status as employee or
independent contractor, which was a hotly contested issue
requiring evaluation of pay stubs, time records, and deposition
testimony, evidence that was also necessary to establish his other
claims. He argues his counsel spent a total of 191.2 hours in this
action preparing pleadings, drafting discovery and discovery
motions, obtaining testimony from Wu, and refuting defendants’
independent contractor defense. Wu argues counsel had to
review and organize Wu’s W-2, paystubs, and time records, and
prepare a summary judgment motion, and even had he brought
only one cause of action for unpaid wages, his attorney could not
have completed all the work necessary to be ready for trial within
the approximately 30 hours that $10,000 of attorney’s fees would
represent.
       However, Wu does not dispute that his overtime claim was
provable largely on calculations derived from documents he
possessed early in the litigation, and offers no evidence
supporting his contention that a lone overtime claim would have
required extensive discovery and law and motion practice
relating to his status as an employee or independent contractor.

                                12
We therefore cannot conclude that the trial judge’s appraisal was
“clearly wrong.” (Chavez v. Netflix, supra, 162 Cal.App.4th at p.
64.)
                         DISPOSITION
      The judgment and order are affirmed. Respondents are to
recover their costs on appeal.
      NOT TO BE PUBLISHED

                                               CHANEY, J.

We concur:

             ROTHSCHILD, P. J.

             BENDIX, J.

                               13