In Edwards v. Broadwater Casitas Care Ctr., ___ Cal.App.4th ___ (Dec. 5, 2013), the California Court of Appeal (Second Appellate District, Division Five) denied the employer appellee’s motion to dismiss the appeal.

Plaintiff was unsuccessful in arbitration of her claims against her employer and individual defendants.  Subsequently, the Los Angeles County Superior Court awarded Defendants $19,826 in costs and $158,471.25 in attorney’s fees. On February 9, 2013, Plaintiff filed a chapter 13 bankruptcy petition which identified the $19,836 cost award but not $158,471.25 attorney fee award.  Nor did Plaintiff object to or appeal a debt repayment plan issued by the bankruptcy court that required Plaintiff to pay 8% of the total fees and costs awarded (roughly $14k).

Although Plaintiff appealed the cost and attorneys’ fee award, Defendants moved to dismiss plaintiff’s appeal as moot because the merits of Plaintiff’s appeal were already resolved in the bankruptcy proceeding.

The appellate court denied the motion, finding that a bankruptcy debt repayment plan does not have any preclusive effect when a state court action remains unresolved at the time bankruptcy proceedings are initiated.  Furthermore, federal bankruptcy law does not prevent a Plaintiff from challenging the trial court’s authority to award the fees and costs in the first place.