Opinion
B291268 B293937
02-24-2021
PAMELA CHEVREAUX, Plaintiff and Appellant, v. LONG BEACH MEMORIAL MEDICAL CENTER, Defendant and Respondent. PAMELA CHEVREAUX, Plaintiff and Respondent, v. LONG BEACH MEMORIAL MEDICAL CENTER, Defendant and Appellant.
Law Offices of Victor L. George, Victor L. George, Elvis Tran; Esner, Chang & Boyer, Stuart B. Esner, Holly N. Boyer and Shea S. Murphy for Plaintiff and Appellant. Buchalter, Robert M. Dato; Godes & Preis, James N. Godes and Joshua R. Mino for Defendant and Appellant.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. Los Angeles County Super. Ct. No. BC654679 APPEALS from a judgment and postjudgment orders of the Superior Court of Los Angeles County, Michael P. Linfield, Judge. Affirmed in part and reversed in part with directions. Law Offices of Victor L. George, Victor L. George, Elvis Tran; Esner, Chang & Boyer, Stuart B. Esner, Holly N. Boyer and Shea S. Murphy for Plaintiff and Appellant. Buchalter, Robert M. Dato; Godes & Preis, James N. Godes and Joshua R. Mino for Defendant and Appellant.
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INTRODUCTION
Pamela Chevreaux appeals from a judgment in favor of her former employer Long Beach Memorial Medical Center (LBM) based on its attorney's alleged misconduct during the jury trial of plaintiff's claim for retaliation in violation of public policy. LBM in turn appeals from the trial court's denial of its motion for attorney fees and granting of plaintiff's motion to tax costs. We affirm the judgment and the order denying LBM's motion for attorney fees. We affirm in part and reverse in part the order granting plaintiff's motion to tax costs. We remand the matter and direct the court to conduct further proceedings to determine the amount of costs, if any, LBM is entitled to recover for jury fees, court reporter fees, and trial exhibits.
FACTS AND PROCEDURAL BACKGROUND
1. Facts underlying plaintiff's claims
We summarize the facts relevant to the appeal from plaintiff's operative first amended complaint and the trial testimony. We discuss additional facts in the Discussion section for each appeal.
Plaintiff was the vice president of ambulatory services at LBM—an administrative position. She oversaw the in-patient rehabilitation unit as part of her duties. State and federal regulations govern the eligibility of patients to be transferred to that unit. The unit's medical directors, Drs. Jason Koh and Steven Becker, were required to approve any admission into the unit. In mid-2016, plaintiff's supervisor, chief operating officer Tamra Kaplan, allegedly began to pressure plaintiff to accept potentially unqualified LBM patients—who did not meet the required state and federal guidelines—into the rehab unit to alleviate a backup of patients on the medical-surgical floor. The chief executive officer and chief nursing officer also allegedly pressured plaintiff.
Plaintiff refused to comply with their requests. She was concerned about admitting patients using criteria different from Medicare's 13 diagnostic criteria. She believed all patients had to meet those criteria. Plaintiff also said she was concerned about admitting homeless patients to the unit because they did not have a discharge destination. Plaintiff thought LBM could be violating federal and state laws by admitting inappropriate patients. She believed LBM charged the state for unqualified patients admitted to the rehab unit.
According to trial testimony, however, up to 40 percent of the rehab unit's patients did not need to meet the Medicare diagnostic criteria if they otherwise qualified for admission. Plaintiff admitted at trial she could have been wrong.
In October 2016, LBM realized it would have to reduce its workforce to meet its budget, but it did not want to eliminate any patient care positions. Kaplan recommended terminating plaintiff's employment as part of that reduction in force (RIF). Plaintiff made about $268,000 a year and managed fewer employees than other vice presidents. Eliminating plaintiff's position allowed LBM to eliminate fewer positions in total. LBM achieved a significant cost savings by eliminating plaintiff's position. Plaintiff's job performance had nothing to do with the decision to lay her off, although Kaplan had the opportunity to terminate plaintiff's employment in September 2016, but did not. Kaplan thought plaintiff was a "good employee."
LBM terminated plaintiff's employment on January 27, 2017, as part of the RIF. Plaintiff was 62 years old. LBM laid off a total of 124 employees. Of LBM's six vice presidents, only plaintiff was laid off. Plaintiff sued LBM for age discrimination in violation of Government Code section 12900 et seq. (FEHA), retaliation in violation of public policy, and retaliation in violation of Government Code section 12653, subdivision (a), the California False Claims Act (CFCA).
2. LBM's counsel's alleged misconduct during trial
Only plaintiff's cause of action for retaliation in violation of public policy went to trial. Before trial, plaintiff moved in limine to exclude evidence relating to her job performance, including her performance reviews, based on Kaplan's admission that performance was not a factor in terminating plaintiff's employment. LBM agreed plaintiff's performance played no role in the decision to include her in the RIF. But it argued her performance evaluations were relevant to its after acquired evidence defense and to impeach plaintiff should she claim she never received a poor review. The court granted the motion "unless plaintiff opens the door," i.e., "testifies that she's had superb performance reviews, et cetera, then defendant can bring up these reviews for impeachment or cross-examination."
Plaintiff's retaliation claim was a Tameny claim: a tort action for wrongful termination based on an employer's alleged conditioning of the plaintiff's employment on her "participation in unlawful conduct." (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170.) Plaintiff claimed she was retaliated against because she opposed what she "reasonably believed to be a violation of the Medi-Cal Program of the State of California."
Before opening statements, LBM's counsel told the court it wanted to refer to, but not show, a September 2016 "letter of expectation"—a written warning Kaplan gave plaintiff based on employees' complaints plaintiff had pressured them to help her move out of her home and had isolated an employee from key meetings and communications. LBM wanted to be able to tell the jury that, had Kaplan wanted to retaliate against plaintiff about the rehab unit patient issues, she could have fired her in September 2016. The court responded, "You're now going beyond where we were in the motions in limine, and this is new information that you're presenting to the court right now." The court told counsel not to use the evidence during LBM's opening statement, but "if it comes in, it will come in."
During plaintiff's case, her psychiatric expert, while testifying on direct about her history of stable employment, said, "In looking at the performance ratings from Long Beach, she did quite well." Dr. Becker also testified during plaintiff's case that he was shocked she had been let go because he "was not aware that she was doing anything wrong to begin with. [He] wasn't aware that she was on the chop block," so he was "surprised" to hear it.
Plaintiff called Kaplan as a hostile witness. On cross-examination, LBM's counsel asked her, "You've had the opportunity, prior to the layoff, to terminate Ms. Chevreaux if you wanted to do that?" The court overruled plaintiff's counsel's objection, and Kaplan testified she had that opportunity in the summer up until September of 2016. She "made the choice not to" terminate plaintiff at that time. LBM's counsel then asked, "You gave her another chance?" This time the court sustained plaintiff's counsel's objection. LBM's counsel continued, "And these layoffs were implemented in January 2017, correct?" After Kaplan answered affirmatively, counsel asked, "About four months later after you had that earlier opportunity?" Kaplan again answered, "Correct."
Shortly after this exchange, the court addressed the issue of plaintiff's performance with counsel, outside the jury's presence. LBM's counsel argued plaintiff had opened the door to performance evidence through her expert's and Dr. Becker's testimony that her evaluations were good and she was doing fine. Counsel again argued LBM should be permitted to show that, had LBM wanted to fire plaintiff to retaliate against her, it had the opportunity to do so four months before the RIF. Plaintiff's counsel objected. The court ruled it would not allow LBM to introduce the September 2016 letter of expectation.
During closing argument, plaintiff's counsel indirectly referred to plaintiff's job performance, telling the jury, "She never had a write-up. She never . . . got anything to indicate she was bad." In his closing argument, LBM's counsel argued, "[I]t's really important to note that plaintiff's counsel told you at least twice in his closing, that she never had any performance problems. And you already know that that's not true. Now, Ms. Kaplan told you that [plaintiff] was not included in the layoff for performance reasons. That wasn't a factor. . . . That's true. However, it's not true that [plaintiff] never had any performance problems. I wasn't allowed to show it to you, but you remember Ms. Kaplan . . . ." Plaintiff's counsel objected, and the court warned, "Counsel . . . ."
LBM's counsel said he would move on. He then stated, "Ms. Kaplan told you that in September of 2016, only four months before the reduction in force, she had the opportunity to terminate the plaintiff. For reasons totally unrelated to anything in this case. In September 2016. And you remember what she told you? She said, 'I didn't do it. I gave her another chance.' . . . [I]f Ms. Kaplan was so upset, horrified, angry, . . . to the point of wanting to retaliate against [plaintiff], what sane person would not have jumped on that chance in September of 2016? Why on earth would she have waited until the layoffs in January of 2017? How does that make sense? Why would anybody do that if they had a retaliatory intention? This occurred before there were even the October discussions about the layoffs. Why would Ms. Kaplan have waited if she intended to retaliate? It doesn't make sense."
LBM's counsel again argued, "if somebody intends to retaliate, and they intend to retaliate intentionally, that's going to happen at the first opportunity." He asserted that, if Kaplan wanted to retaliate against plaintiff, September 2016 "would have been it."
After a five-day trial, the jury returned a nine to three verdict in favor of LBM on plaintiff's cause of action for retaliation in violation of public policy.
3. Plaintiff's motion for new trial
Plaintiff moved for a new trial on the ground LBM's counsel engaged in misconduct by eliciting testimony about and referring in closing argument to plaintiff having job performance issues in September 2016, in violation of the court's in limine ruling. Plaintiff submitted juror declarations stating some jurors had discussed that Kaplan could have terminated plaintiff in September 2016 for performance issues, but had given plaintiff a second chance; that if Kaplan wanted to retaliate against plaintiff she could have done so in September 2016; and that they were unable to view information relating to the September 2016 performance issues.
The trial court denied the motion, concluding, "reasonable jurors could have fairly come to different conclusions based on the testimony of the witnesses to which there were no objections. In other words, there is sufficient credible evidence to support the verdict." The court found the jurors' declarations did "nothing more than establish that the jurors discussed passing references to—and lack of evidence of—job performance issues. There is no evidence that any juror improperly made their decision on any evidence that was improperly discussed." Although the court found it was a "close case," it did not disagree with the jury's verdict and could not find the verdict or defense counsel's statements resulted in a miscarriage of justice. At the hearing on plaintiff's motion, the court clarified it did not find LBM's counsel engaged in misconduct.
The court clarified it thought the case was close because there was evidence on both sides that could sustain a verdict either way, not because the verdict was nine to three.
4. LBM's requests for attorney fees and costs
After entry of judgment in its favor, LBM filed a memorandum of costs and motion for attorney fees. Plaintiff moved to tax costs, arguing LBM was not entitled to more than half of the litigation expenses it sought. LBM based its motion for fees on the ground it was the prevailing party on plaintiff's claims for age discrimination under FEHA and violation of the CFCA because plaintiff had dismissed them the day before and the first day of trial, respectively. LBM argued plaintiff knew those claims were frivolous from the outset, entitling LBM to recover its attorney fees as a prevailing defendant.
LBM filed its motion for attorney fees after plaintiff filed her motion to tax costs.
Plaintiff filed her reply in support of her motion to tax costs, followed by her opposition to LBM's motion for attorney fees. She newly argued defendant was not entitled to recover any costs under Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 115 (Williams) because a prevailing defendant in a FEHA action may recover its costs only if the plaintiff's case was without foundation, and hers was not. Plaintiff similarly opposed LBM's motion for attorney fees.
The court permitted LBM to file a sur-reply to address plaintiff's new argument. In addition to asserting plaintiff's claims were frivolous, LBM argued it was entitled to all of its costs because the evidence and discovery needed to establish the frivolous nature of plaintiff's FEHA claim were "so intertwined with the remaining two claims that apportionment would be impossible." At the hearing on the motions, LBM also contended that at a minimum it was entitled to its trial costs from prevailing on plaintiff's remaining non-FEHA claim at trial.
The court concluded LBM failed to demonstrate plaintiff's FEHA claim lacked foundation and denied its motion for attorney fees. The court in turn granted plaintiff's motion to tax costs, finding it could not award any costs to LBM under Williams because LBM did not apportion the costs it expended to defend plaintiff's non-FEHA claims from those attributable to its defense of her FEHA claim.
The court noted LBM's counsel's statement at oral argument that it could go back and apportion costs—"in particular, those items that dealt exclusively with the trial"—directly contradicted LBM's statement that its costs could not be apportioned. The court disregarded those arguments on due process grounds and awarded LBM no costs at all.
Plaintiff appealed from the judgment solely on the ground LMB's counsel engaged in prejudicial misconduct. LBM appealed from the trial court's postjudgment orders denying LBM's motion for attorney fees and granting plaintiff's motion to tax costs. We consolidated the two appeals under case number B291268 for briefing, argument, and decision.
DISCUSSION OF PLAINTIFF'S APPEAL
Plaintiff contends LBM engaged in misconduct by eliciting testimony from Kaplan about plaintiff's job performance in September 2016 and referring to that job performance in closing argument despite the trial court's earlier rulings excluding evidence of plaintiff's job performance. She argues the juror declarations submitted to the trial court demonstrate LBM's misconduct was prejudicial requiring the judgment be reversed.
1. Legal principles and standard of review
"In conducting closing argument, attorneys for both sides have wide latitude to discuss the case." (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 795 (Cassim).) Counsel may discuss the merits of the case and may state his or her views of what the evidence shows and the reasonable inferences to be drawn from that evidence. (Id. at pp. 795-796.) "An attorney who exceeds this wide latitude commits misconduct. For example, '[w]hile a counsel in summing up may indulge in all fair arguments in favor of his client's case, he may not assume facts not in evidence or invite the jury to speculate as to unsupported inferences.' " (Id. at p. 796.) Misconduct also may include an attorney's reference to evidence excluded by the court (McCoy v. Pacific Maritime Assn. (2013) 216 Cal.App.4th 283, 304 [attorney cited excluded evidence in closing despite warning]) or repeated attempts to elicit testimony excluded by a motion in limine (Martinez v. Department of Transportation (2015) 238 Cal.App.4th 559, 561, 563-564 [attorney asked questions more than 20 times in direct violation of in limine order after court had sustained objections]).
It is not enough for the plaintiff to show attorney misconduct occurred. To justify a new trial, the plaintiff must demonstrate the misconduct was prejudicial. (Garcia v. ConMed Corp. (2012) 204 Cal.App.4th 144, 149 (Garcia).) The reviewing court independently determines "whether it is reasonably probable [that the appellant] would have achieved a more favorable result in the absence of that portion of [attorney conduct] now challenged." (Cassim, supra, 33 Cal.4th at p. 802.) We must examine " 'the entire case, including the evidence adduced, the instructions delivered to the jury, and the entirety of [counsel's] argument,' in determining whether misconduct occurred and whether it was sufficiently egregious to cause prejudice." (Garcia, at p. 149, quoting Cassim, at p. 802.) Reviewing the overall record, we take into account various factors, including, " 'the nature and seriousness of the remarks and misconduct, the general atmosphere, including the judge's control, of the trial, the likelihood of prejudicing the jury, and the efficacy of objection or admonition under all the circumstances.' " (Garcia, at p. 149, quoting Sabella v. Southern Pac. Co. (1969) 70 Cal.2d 311, 320-321.) 2. Plaintiff did not preserve the issue of attorney misconduct , but there is no prejudice in any event
Our standard of review as to whether attorney misconduct occurred is unclear. (See Garcia, supra, 204 Cal.App.4th at p. 149 [noting Cassim did not comment on the scope of appellate review of a trial court's attorney misconduct findings].) Plaintiff asserts we independently determine the issue of misconduct, while LBM contends we defer to the trial court. Because we conclude plaintiff was not prejudiced by any purported attorney misconduct, we need not decide the issue. We note LBM's counsel's comment to the jury that he "wasn't allowed to show it to you"—referring to the September 2016 letter of expectation the trial court had excluded—was clearly inappropriate.
"A party ordinarily cannot complain on appeal of attorney misconduct at trial unless the party timely objected to the misconduct and requested that the jury be admonished. [Citation.] The purpose of these requirements is to allow the trial court an opportunity to remedy the misconduct and avoid the necessity of a retrial; a timely objection may prevent further misconduct, and an admonition to the jury to disregard the offending matter may eliminate the potential prejudice." (Rayii v. Gatica (2013) 218 Cal.App.4th 1402, 1411-1412 (Rayii); see Cassim, supra, 33 Cal.4th at p. 794.) "The failure to timely object and request an admonition waives a claim of error unless the misconduct was so prejudicial that it could not be cured by an admonition [citations], an objection or request for admonition would have been futile [citation] or the court promptly overruled an objection and the objecting party had no opportunity to request an admonition [citation]. Attorney misconduct is incurable only in extreme cases." (Rayii, at p. 1412.)
Plaintiff's counsel successfully objected when LBM's counsel asked Kaplan about whether plaintiff had any performance issues, but the court allowed questioning over objection about Kaplan having had "the opportunity" in September 2016 to terminate plaintiff's employment and her choice not to do so. Plaintiff does not challenge that evidentiary ruling.
During closing argument, plaintiff's counsel again objected to LBM's counsel's "I wasn't allowed to show it to you" statement. The trial court did not rule on the objection, but began to admonish LBM's counsel when counsel said he would move on. Plaintiff's counsel said nothing more and did not object to LBM's additional references during his argument to Kaplan's testimony that she had the opportunity to terminate plaintiff's employment in September 2016, or his argument that, had Kaplan wanted to retaliate against plaintiff, she would have done so at that time. Nor did plaintiff's counsel ever ask the trial court to admonish or give a limiting instruction to the jury during Kaplan's testimony or during or after closing argument.
We requested additional briefing on the issue of whether plaintiff failed to preserve her claim of attorney misconduct. Both sides responded. Plaintiff's counsel asserts the issue is not waived. He argues the misconduct concerning the inadmissibility of evidence about plaintiff's job performance "was threaded throughout" the proceedings, not only during closing argument. Counsel asserts he repeatedly objected to defense counsel's attempts to introduce the evidence, including during sidebar discussions, and again objected during closing argument. He argues plaintiff did not object to every instance of misconduct "because the volume of acts of misconduct became sufficiently numerous."
Counsel also argues defense counsel's invitation to jurors "to speculate about" the contents of a document he could not show them tainted his remaining comments to which plaintiff's counsel did not object, and LBM should not benefit from putting plaintiff in the position between emphasizing counsel's "impermissible" argument with repeated objections or risking an "imperfect" record. Plaintiff contends the single statement alone was sufficiently prejudicial to warrant reversal.
Plaintiff may have sufficiently objected, but plaintiff's counsel does not address his failure to ask the court to admonish the jury. We are not unsympathetic to counsel's desire to avoid emphasizing the excluded evidence that defense counsel improperly mentioned. But plaintiff's counsel had ample opportunity to ask the court for a limiting instruction outside of the jury's presence. For instance, during the sidebar discussion about the expectation letter, plaintiff's counsel could have asked the court to admonish the jury that LBM conceded plaintiff was not fired for performance issues and the jury was not to speculate about the reason Kaplan could have fired plaintiff earlier. Moreover, after closing arguments, the trial court specifically asked counsel if they wanted to put anything on the record before the jurors returned from their break for their final instructions. At that time, plaintiff's counsel could have asked the court to instruct the jury not to speculate about the document defense counsel alluded to or to provide some other curative instruction. He did not.
We do not agree with plaintiff's implied contention that defense counsel's statement during closing argument (and questioning of Kaplan) "was so persistent or egregious as to justify the conclusion that it was incurable." (Rayii, supra, 218 Cal.App.4th at p. 1412 [misconduct claim forfeited where plaintiff failed timely to object to defense counsel's reference during opening statement to downsizing of defendant company due to economy and did not ask for admonition to jury].) Plaintiff has not demonstrated an admonition or curative instruction would have been futile. Because plaintiff did not give the trial court the opportunity to remedy the purported misconduct by requesting an admonition, she has failed to preserve the issue for appeal.
Nevertheless, we have independently reviewed the record and conclude LBM's counsel's remarks were not prejudicial. LBM's counsel himself told the jury LBM did not terminate plaintiff's employment based on her performance. We agree with the trial court that, although the three juror declarations show that some jurors discussed counsel's references to job performance issues, they do not demonstrate that any juror improperly based his or her decision on improperly discussed evidence. Plaintiff notes the trial court ruled it would not permit the introduction of the expectation letter so that LBM could show Kaplan would have terminated plaintiff in September 2016 if she was motivated by intentional retaliation. We do not view that ruling as prohibiting LBM from arguing the permitted testimony—that Kaplan had the opportunity to fire plaintiff in September 2016, but did not—demonstrated she lacked retaliatory intent when she later included plaintiff in the RIF. The court also instructed the jury more than once that counsel's argument was not evidence.
We also do not agree LBM's counsel "repeatedly" violated the court's order excluding evidence of plaintiff's performance. Plaintiff mentions LBM's attempt to introduce her performance during opening statements, but LBM's counsel discussed the issue with the court before the opening statements and then did not bring it up. LBM's counsel did question Kaplan about plaintiff's performance and the court sustained plaintiff's counsel's objections, but counsel explained he believed plaintiff had opened the door through her expert's and Dr. Becker's testimony. Moreover, as we have said, the trial court allowed Kaplan to testify she had the opportunity to fire plaintiff in September 2016. LBM's counsel thus could refer to that testimony during his summation and argue the reasonable inferences to be drawn from that evidence, although it was improper for him to tell the jury he was not allowed to show them a piece of evidence and essentially invite their speculation about it.
Moreover, most of that discussion was about Kaplan's permitted testimony that she could have fired plaintiff in September 2016. The jurors also mentioned that Kaplan gave plaintiff "a second chance." Plaintiff's counsel successfully objected to LBM's counsel's question, "You gave her another chance?" Just before that question, however, Kaplan had testified she "made the choice not to [terminate plaintiff's employment at that time]." The jurors reasonably could interpret Kaplan's statement as giving plaintiff a second chance. Some jurors also discussed how it didn't make sense for Kaplan to wait until 2017 to retaliate when she could have fired Kaplan in September 2016. LBM's counsel made that argument in his closing, but, as we have said, his argument about the significance of Kaplan's permitted testimony was not improper and plaintiff did not object to it in any event. As the trial court found, some jurors' reference to not having been able to see certain evidence does not demonstrate they improperly considered information they were not given.
Moreover, as LBM argues, even if there had been no testimony or mention whatsoever about Kaplan's ability to terminate plaintiff's employment before the RIF or LBM's inability to show the jury evidence of plaintiff's performance issues, it is not reasonably likely plaintiff would have obtained a more favorable verdict. At trial, plaintiff claimed LBM "wrongly retaliated against her in violation of public policy because of her efforts to stop false claims for payment to the Medi-Cal program of the State of California." (Italics added.) She had to prove not only that she "had a reasonably-based suspicion of a false claim," but that "it was reasonably possible for her conduct to lead to a false claims action."
The evidence did not show a reasonable possibility of a false claim to the state. Plaintiff's expert testified hospitals submit a claim to the state by presenting a treatment authorization form (TAR) through Medi-Cal. He testified TARs can be fraudulently submitted by either (1) including incorrect or inaccurate information about the patient's functional level, discharge disposition, and/or the justification for why the patient needs in-patient rehabilitation, or (2) by submitting a TAR for an undocumented immigrant. Plaintiff's expert agreed he had not seen any evidence that anyone embellished or fraudulently submitted any TARs to Medi-Cal.
Plaintiff did not present any evidence that anyone presented false information in a TAR to the Medi-Cal program or asked her to do so, and there was no mention of undocumented immigrants. Indeed, when asked, "You were never asked to take any unqualified patients into the [rehab unit] in 2016, were you, Ma'am?", Plaintiff responded, "I don't know. I mean, I guess not, I don't know."
Plaintiff also testified her concern about LBM submitting false claims was based on a 2010 federal recovery audit resulting in a denial of $3 million in previously paid claims. Plaintiff considered the programs to be integrated, but understood the state administered Medi-Cal and the federal government administered Medicare. She also understood submission of a TAR was not required for Medicare, and the admissions process for Medi-Cal and Medicare were different. Plaintiff's expert also testified the federal recovery audit and TAR process are completely unrelated. Based on the evidence, we cannot find it reasonably likely the jury would have come to the conclusion plaintiff's suspicion LBM had submitted a false Medi-Cal claim was reasonable or that it would have been reasonably possible for her conduct to lead to a false claims action based on Medi-Cal claims.
LBM received 95 percent of the money back after it appealed. LBM's CEO testified that type of audit was conducted by an independent contractor hired by the federal government on a contingency fee basis.
DISCUSSION OF LBM's APPEAL
We review the trial court's ruling denying attorney fees and costs to LBM under the deferential abuse of discretion standard of review. (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 989; Chaaban v. Wet Seal, Inc. (2012) 203 Cal.App.4th 49, 52.) Under Government Code section 12965, subdivision (b), the trial court has discretion to award attorney fees and costs to a prevailing defendant in a FEHA action if "the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so." (See also Williams, supra, 61 Cal.4th at p. 115 [concluding rule that prevailing defendant may recover attorney fees only if the plaintiff's "action was objectively groundless" articulated in Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n (1978) 434 U.S. 412, 421-422 applicable to costs].)
1. The trial court did not abuse its discretion in finding plaintiff's claim was not frivolous
LBM contends it was entitled to attorney fees and costs under Government Code section 12965, subdivision (b) because plaintiff never had a basis to allege her age discrimination claim. LBM makes many of the same arguments on appeal that the trial court rejected.
LBM contends plaintiff "never had a reasonable basis to believe that she was replaced by two 'substantially younger individuals,' " as she alleged. Plaintiff alleged she was replaced by two employees who were 45 years old and 40 years old respectively. LBM argues plaintiff had worked with the employees who replaced her "for years," and thus knew they were not substantially younger than her. It contends plaintiff's verified discovery response that LBM replaced her with " 'employees who are age 40 or younger' " was false, as she admitted in her deposition that two of her replacements were 57 and 50 years old. The trial court found defendant failed to present evidence as to when plaintiff learned the age of her replacements or to demonstrate their age "conclusively establishe[d]" plaintiff's age discrimination claim was frivolous.
LBM mischaracterizes plaintiff's deposition testimony. She testified she did not know the ages of her replacements and responded, "I don't think it would surprise me. It wouldn't surprise me whatever age you said," to defendant's counsel's question, "Would it surprise you if [Casey Hudson's] age was 57?" In her reply to her motion to tax costs, plaintiff argued her age discrimination claim was not without foundation, asserting "[s]he was replaced by two substantially younger people: Casey Hudson who is 57 years old and Mary Montgomery who is 50 years old or so."
In its reply to its motion for attorney fees, LBM asserted plaintiff became aware of the age of her main replacement, Casey Hudson, when plaintiff deposed her on December 7, 2017. LBM argued plaintiff's claim at a minimum became frivolous at that point, if not baseless at its inception. As the trial court noted, the fact Hudson may have said she took over most of plaintiff's job responsibilities did not prove that she did or that she was the only employee who "might reasonably be considered plaintiff's replacement." The court noted plaintiff testified at her March 28, 2018 deposition that Hudson, Mary Montgomery, and Brandi Lazorek replaced her, and LBM "speculate[d]" plaintiff "always knew that 'Ms. Montgomery was 50 and Ms. Lazorek was 44.' " The court concluded that even if LBM were correct, it failed to show those employees were "not young enough in relation to plaintiff to give rise to a reasonabl[e] inference of age discrimination."
We agree. Our Supreme Court has noted courts "have differed about the exact gap in age that is significant for purposes of a discriminatory inference" in age discrimination cases. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 368 [citing state and federal cases where age gap less than 10 years was considered insignificant and five-year and eight-year gaps were deemed significant].) We cannot find the trial court abused its discretion in concluding plaintiff's age discrimination claim was not "objectively without foundation" from the outset or that plaintiff continued to litigate the claim "after it clearly became so" (Williams, supra, 61 Cal.4th at p. 115), when plaintiff at some point learned two of her three replacements were in their 50's. All three were undisputedly younger than plaintiff.
Plaintiff was 62 when LBM fired her and reassigned her duties. Hudson, Montgomery, and Lazorek were five, twelve, and eighteen years younger than plaintiff, respectively.
LBM also points to plaintiff's "admission" that "her age claim was actually based on her salary, not her age," and argues she had no evidence demonstrating she was included in the RIF because of her age. At her deposition, plaintiff opined Kaplan included her in the RIF so she could hire someone younger at a lower salary. When LBM's counsel asked plaintiff if she believed she was included in the RIF "to eliminate [her] higher salary and not because of some discrimination against old people," plaintiff responded, "No. I think it was both." She also responded, "I do not know," when asked if Kaplan included her in the RIF because of her age.
LBM conceded firing employees with higher salaries may be used as evidence of age discrimination under a disparate impact theory. As the trial court noted, "[t]he fact that plaintiff's counsel may have pursued the claim under the wrong theory [disparate treatment] does not mean that there was no evidence of age discrimination or that plaintiff did not reasonably believe that she had been discriminated against." And, plaintiff's lack of direct knowledge of Kaplan's state of mind when choosing to fire plaintiff is not an admission that she "brought or continued litigating the [claim] without an objective basis for believing it had potential merit." (Williams, supra, 61 Cal.4th at p. 100.)
LBM's counsel also questioned plaintiff about her statement in her interrogatory responses that Kaplan "continuously" asked her when she was going to retire. Plaintiff testified Kaplan asked her about retirement in "conversation," not in a "mean, threatening way." LBM asserted this fact also illustrated the frivolous nature of plaintiff's age discrimination claim. Plaintiff's possible concession about this piece of evidence does not, as the trial court reasoned, "negate the remainder of her evidence."
Substantial evidence supports the trial court's finding that LBM failed to show plaintiff's FEHA claim was frivolous. Plaintiff may have had a weak case, but it was not groundless. Because plaintiff's FEHA claim was not frivolous, LBM had no basis to recover its attorney fees and, under Williams, was not entitled to its costs associated with defending that claim.
LBM does not challenge the trial court's ruling that it also was not entitled to attorney fees based on plaintiff's dismissed CFCA cause of action.
2. The trial court did not err in refusing to apportion LBM's costs
LBM contends it nevertheless was entitled to all of its litigation costs as a matter of right under section 1032, subdivision (b) of the Code of Civil Procedure (section 1032(b)) because it prevailed on plaintiff's CFCA cause of action—when she dismissed it the first day of trial—and, of course, on her non-FEHA retaliation cause of action after trial. LBM argues that because its costs defending the non-FEHA causes of action—which are not subject to Williams—were inextricably intertwined with its defense of plaintiff's FEHA claim, the trial court should have awarded LBM all of its costs.
LBM relies on our Supreme Court's holding in Reynolds Metals Co. v. Aperson (1979) 25 Cal.3d 124, 129-130, that "[a]ttorney'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." LBM argued below, as it does now, it similarly was entitled to recover costs common to both plaintiff's FEHA claim and non-FEHA claims. It argued only costs exclusively associated with plaintiff's FEHA claim "should be excised" under Reynolds.
LBM is wrong. In Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1059 (Roman), this district considered whether Williams applied "to costs that cannot be apportioned between overlapping FEHA and non-FEHA claims." We agree with our colleagues' reasoning that the Williams "rule of discretion," applies in such situations. (Roman, at p. 1059.) As the court explained, "to compel an award of costs under section [1032(b)], simply because the plaintiff, based on the same alleged misconduct, had pleaded other civil rights theories in addition to his or her FEHA causes of action" would discourage potentially meritorious antidiscrimination lawsuits by plaintiffs with limited resources. (Id., at pp. 1059-1060.) The court concluded, "Although section 1032[(b)], also serves an important purpose, relieving a party whose position was vindicated in court of the basic costs of litigation, when those costs have not been increased by the inclusion of additional theories of liability to the primary FEHA claim asserted, the express public policy of Government Code section 12965, subdivision (b), controls. Unless the FEHA claim was frivolous, only those costs properly allocated to non-FEHA claims may be recovered by the prevailing defendant." (Id., at p. 1062, fn. omitted, italics added.)
The Court of Appeal further explained, "the general rule pursuant to section 1032[(b)], is that ordinary litigation costs are recoverable by the prevailing party. Government Code section 12965, subdivision (b) creates an exception to that rule for FEHA cases, allowing a prevailing defendant to recover costs only upon a showing the lawsuit was objectively groundless. By a parity of reasoning to the cases regarding allocation of attorney fees [e.g., Reynolds], that provision establishing an exception to the general rule for an award of costs should apply to any other cause of action that is intertwined and inseparable with the FEHA claims." (Roman, supra, 237 Cal.App.4th at p. 1062, fn. 20; see Dane Elec Corp., USA v. Bodokh (2019) 35 Cal.App.5th 761, 775 ["[W]hen 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. When attorney fees or costs have been incurred on claims subject to both statutes, the more specific fee-shifting statute will govern the entire award of fees or costs."].)
The court in Roman noted that if the pleading of non-FEHA causes of action "had led [the defendant] to incur additional allowable costs (for example, the cost of taking a deposition not otherwise required to contest the FEHA claim), [the defendant] would be entitled to recover at least those costs under section 1032[(b)]." (Roman, supra, 237 Cal.App.4th at p. 1059.) Here, however, LBM did not attempt to separate out costs it would not have incurred in the absence of plaintiff's non-FEHA causes of action. Instead, it argued the costs could not be separated by cause of action and it thus was entitled to all of its costs, even those incurred partly in its defense of plaintiff's FEHA claim.
Under Roman's sound interpretation of Williams, quite the opposite is true: the intertwined nature of LBM's costs required the court to deny all costs that could not be apportioned to non-FEHA claims. The court therefore did not abuse its discretion in declining to go through LBM's costs—that it admitted could not be apportioned—and determine on its own what specific items were attributable solely to LBM's defense of plaintiff's non-FEHA claims.
3. The trial court should determine if LBM is entitled to any of its trial costs
At the hearing, LBM argued for the first time that at a minimum it was entitled to its trial-related costs—for jury fees, court reporter fees, and expenses related to trial exhibits—because the trial itself did not involve plaintiff's FEHA claim. The trial court did not consider LBM's contention—citing due process concerns—because the argument was not part of LBM's brief and contradicted its earlier statement that "costs 'cannot be apportioned.' " The court thus did not determine whether LBM indeed would not have incurred its claimed costs but for the trial of plaintiff's non-FEHA retaliation claim or whether those costs were reasonable and necessary. On appeal, LBM contends the trial court at a minimum should have awarded those three categories of trial costs because they do not require apportionment.
The three items listed on LBM's memorandum of costs are: item 2 for $519.96 in jury fees; item 11 for $7,793.79 in court reporter fees; and item 12 for $12,492.52 in fees and costs related to models, enlargements, and photocopies of exhibits.
Based on our reading of the record, it appears LBM did not specifically address this issue in its sur-reply because its counsel understood it was to address plaintiff's argument raised in her reply brief that Williams precluded LBM from recovering any of its costs. Given the last minute nature of plaintiff's objection under Williams and LBM's entitlement under section 1032(b) to costs it incurred during the trial of plaintiff's non-FEHA retaliation claim if it would not have incurred those costs otherwise, we conclude the trial court should consider—after allowing plaintiff an opportunity to respond—if LBM is entitled to the amounts it claims under items 2, 11, and 12.
Clearly, LBM would not have incurred jury fees if plaintiff's non-FEHA retaliation claim had not gone to trial. Those fees, totaling $519.96, appear to be recoverable under Williams, as explained in Roman. We cannot simply direct the trial court to award LBM the entirety of its trial costs, as LBM asks, however. As plaintiff argues, factual determinations remain for the trial court to make.
First, in her motion to tax costs, plaintiff objected to LBM's recovery of court reporter fees (item 11) on the ground the parties "privately [had] agreed to incur the costs of a court reporter" for trial. She also argued those costs were not recoverable because the court had not ordered the transcripts. Contrary to plaintiff's contention, court reporter fees are recoverable. (See Gov. Code, § 68086, subd. (d)(2) [party may request appointment of certified shorthand reporter as the official reporter pro tempore; fees and charges paid to reporter are recoverable as taxable costs by the prevailing party].) The trial court is in the best position to determine, however, whether LBM and plaintiff in agreeing to split the cost of the court reporter also agreed to forfeit their right to recover those fees as costs.
Second, questions of fact exist as to whether LBM should recover the entirety of its claimed trial exhibit costs (item 12). Plaintiff argues the trial court must determine under section 1033.5, subdivision (a)(13) of the Code of Civil Procedure whether the exhibits were used at trial and helpful to the jury. LBM contends plaintiff never objected to item 12 in her motion to tax costs and has forfeited any right to do so on appeal or remand. True, plaintiff did not separately argue item 12 should be taxed to exclude the cost of exhibits not helpful to the trier of fact or unreasonable in amount. Nevertheless, plaintiff's counsel did argue at the hearing—in response to LBM's new argument—LBM should not be permitted to apportion any costs after taking the position it was entitled to all of its costs. Accordingly, we find it appropriate for the trial court to determine whether the exhibits were "reasonably helpful to aid the trier of fact" as required by section 1033.5, subdivision (a)(13).
Plaintiff's counsel also asserted plaintiff dismissed her FEHA claim to streamline the case to be heard within the court's five-day limit and LBM should not benefit from that.
Moreover, it is unclear if LBM incurred some of the costs claimed under item 12 to prepare exhibits relating to plaintiff's FEHA claim that ultimately were not used. In its motion for attorney fees, LBM asserted it "fully prepar[ed] for a jury trial" on plaintiff's FEHA claim. LBM would not be entitled to recover those costs under Williams and Roman.
Accordingly, we remand the matter to the trial court to conduct further proceedings to answer these questions and to determine whether LBM is entitled to the amounts identified in item numbers 2, 11, and 12 of its memorandum of costs filed July 5, 2018. As part of its inquiry, the trial court also should determine if those costs were "reasonably necessary to the conduct of the litigation" and "reasonable in amount." (Code Civ. Proc., § 1033.5, subd. (c)(2)(3).)
DISPOSITION
The judgment in favor of LBM is affirmed. The September 19, 2018 order denying LBM's motion for attorney fees is affirmed. The September 19, 2018 order granting plaintiff's motion to tax costs is affirmed, except as to item numbers 2, 11, and 12. The matter is remanded to the trial court to conduct further proceedings consistent with this opinion to determine the amount, if any, LBM is entitled to recover for those three items of costs. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
EGERTON, J. We concur:
EDMON, P. J.
DHANIDINA, J.