April 2014 Bar Bulletin
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April 2014 Bar Bulletin

Fee Shifting: When Proportionality Doesn't Matter

By David C. Burkett and Michael R. Caryl

 

(Second of two parts)

Part 1 of this article (February Bar Bulletin) identified the normal, fee-shifting rule in Washington requiring "proportionality" between the amount in controversy, the prevailing party's degree of success and the amount of attorney fees awarded to the prevailing party. Part 1 also discussed one of the major exceptions to the proportionality rule - industrial insurance appeals. This part discusses several other significant exceptions to the proportionality rule.1

Unpaid-Wage Claims

In Brandt v. Impero,2 the Court of Appeals considered whether RCW 49.52.070 (one of the unpaid-wage statutes) permitted recovery of attorney fees expended on an appeal. The Court held:

In seeking to ascertain the reach of the words "attorneys' fees" in RCW 49.52.070, we remember that the statute should be liberally construed in conformity with its intent and purpose to advance the remedy provided by the act. Wage amounts wrongfully withheld may be small. The provision for attorneys' fees was undoubtedly intended to prevent the wrongful withholding of wages and to provide a remedy thought adequate for that purpose. If the remedy to recover unpaid wages intentionally withheld were limited to the recovery of costs and attorneys' fees for services rendered in the trial court, such a remedy might well have what has been called in another context a "chilling effect" upon resort to the statutory remedy provided. A plaintiff wage earner, faced with the prospect of paying his attorneys' fees in the event of an appeal, would be discouraged from seeking the statutory remedy to recover what was rightfully his. In our opinion the legislative intent and policy embodied in RCW 49.52.070 would be best carried out by construing "attorneys' fees" to include the recovery of attorneys' fees on appeal.3

This is the same reasoning the Supreme Court used in the Brand case, which was discussed in Part 1 of this article.4

Schilling v. Radio Holdings, Inc.,5 involved an employee whose employer, facing severe financial difficulties, chose not to pay her wages. The employee sued the corporate employer, the president of the company and others on a variety of theories, including RCW 49.52.070, for the president's willful withholding of wages. At trial, the employee obtained a judgment for $13,955 in unpaid wages, an additional $13,955 in punitive damages (allowable under the statute) and attorney fees and costs.6

The Supreme Court, citing Impero, noted:


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