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How a $300 Wage Disputed Turned Into a Six-Figure Nightmare

By George Khoury, Esq. on January 10, 2019 | Last updated on March 21, 2019

Sometimes, lawyers learn very expensive lessons.

Unfortunately for one Southern California lawyer, a $300 wage dispute ballooned into a six-figure judgment after he made a couple critical mistakes. Mistakes which he is not likely to repeat again.

His first mistake: failing to file a cover sheet on his complaint. His second mistake, and one he now acknowledges: representing himself.

A Limited Difference

The whole dispute arose after an employee abruptly quit. The attorney phoned in the employee's hours so that he could be paid his final check, and the payroll processor accidentally underpaid the employee by $300.

The employee then filed a labor commissioner claim, which was successful and resulted in an award of about $6,000 after penalties and interest. In California, a labor commissioner ruling can be reviewed by the state trial and appellate courts. Sadly, the lawyer, when challenging the labor commissioner decision, failed to file a cover sheet with his complaint indicating he wished to pursue a "limited civil action" due to the amount in controversy meeting the jurisdictional limits.

That mistake led the courts to consider the matter as an "unlimited civil case" which ultimately meant that the prevailing party on appeal would be entitled to their attorney fees and costs. The attorney, of course, lost at the trial court level, which awarded the $6,000 plus another $30,000 in fees. He then appealed the matter, and lost. And while the appellate court's order stated that each side was to bear their own costs, the lower trial court, on the motion of the employee, awarded nearly an additional $70,000 for the successful appeal and motion for fees.

Fool for a Client

Most of us have heard the saying about how a lawyer that represents themselves in court has a fool for a client. This cautionary tale is a reminder of just how horribly wrong it can go when attorneys don't heed this age-old lawyer proverb.

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