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California Case Law Update

EMPLOYMENT

Williams v. Chino Valley Independent Fire District (May 4, 2015) WL 1964947

Facts:
Plaintiff Loring Winn Williams (“Plaintiff”) sued defendant Chino Valley Independent Fire District (“defendant”) for employment discrimination in violation of the California Fair Employment and Housing Act (“FEHA”). The trial court granted summary judgment for the defendant and awarded it costs in an amount to be determined. The defendant filed a memorandum of costs, and plaintiff moved to tax costs.

The trial court granted the motion to tax in part, reducing the award from the requested amount. Defendant was awarded its court costs. Plaintiff appealed, claiming in the absence of finding his action was frivolous, unreasonable, or groundless, defendant should not have been awarded its costs. The following issues were presented before the Supreme Court:
1) Is a defendant prevailing in a FEHA action entitled to its ordinary court costs as a matter of right pursuant to Code of Civil Procedure section 1032, or only in the discretion of the trial court pursuant to Government Code section 12965, a provision of FEHA itself?
2) If the trial court does have discretion, must that discretion be exercised according to the rule applicable to attorney fee awards in certain federal civil rights actions under Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412 (Christiansburg), according to which a prevailing defendant receives its attorney fees only if the plaintiff’s action was objectively groundless?

Holding:
The Supreme Court held Code of Civil Procedure Section 1032(b) mandates prevailing parties recover their costs as a matter of right, except as otherwise expressly provided by statute. Government Code Section 12965(b) allows courts, in their discretion, to award attorney fees and costs to prevailing parties in FEHA actions. Thus Section 12965(b) constitutes an express exception to Section 1032(b), and trial courts have discretion to award ordinary costs to prevailing defendants, but do not need to do so.

When exercising this discretion, courts must follow the rule set forth in Christiansburg. In Christiansburg, the U.S. Supreme Court held a prevailing plaintiff in a Title VII action ordinarily should be awarded his fees, but should not be assessed his opponent’s fees unless a court finds the claim was “frivolous, unreasonable, or groundless, or the plaintiff continued to litigate after it clearly became so.”

The Supreme Court found the rule in Christiansburg applies equally to awards of attorney fees and costs to prevailing parties in FEHA actions. Thus, a prevailing plaintiff should receive his costs and attorney fees unless special circumstances render an award unjust, but a prevailing defendant should not recover his fees and costs unless the court finds the action was “objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.”

CIVIL PROCEDURE

Rodriguez v. Cho (May 7, 2015) WL 2128675

Facts:
In 2011, Rodriguez filed a complaint against defendants Cho and Reliable Building Maintenance (“defendants”) for wrongful termination in violation of public policy, retaliation and violations of the Labor Code. The prayer for relief sought general, special, compensatory, and punitive damages, a civil penalty under Labor Code section 1102.5(f), civil penalties under the Private Attorney General Act, and reasonable attorney fees and costs. The statement of damages disclosed plaintiff was seeking over $3 million in damages.

Defendants did not respond to the complaint, and the trial entered a default judgment against defendants in the amount of $129,673.48. Over two years later, Cho moved to set aside the default, arguing the default was void because the amount of damages was excessive. The trial court denied the motion.

Holding:
The Court of Appeal reversed the trial court’s order denying defendant’s motion to set aside the default judgment, holding the default judgment was excessive and void. The Court explained a court generally may not grant a default judgment which exceeds the amount demanded in the complaint. Here, the dollar figure cited in plaintiff’s complaint was a civil penalty for $10,000. The Court agreed with plaintiff the default judgment was void for exceeding this amount.

Plaintiff relied on Code Civ. Proc. Section 425.11 in arguing the separate statement of damages served with her summons and complaint adequately set forth the damages sought. However, section 425.11, which requires a separate statement of damages, applies only when a complaint is filed in action to recover damages for personal injury or wrongful death. The Court found plaintiff’s suit for wrongful termination, retaliation, and violations of the Labor Code did not constitute a personal injury action. A cause of action for wrongful termination in violation of public policy is primarily defined by the loss of one’s job, an economic benefit which constitutes a property right. The fact plaintiff pled emotional distress damages did not compel a different outcome. “One must look to the nature of the tort, and not merely the type or extent of damages pled.” (Id. at 7.) The tort of wrongful termination does not require emotional distress damages, and thus is not an action to recover damages for personal injury for purposes of section 425.11.

The case was remanded with directions to vacate the judgment. Plaintiff may choose to accept a modified judgment, thus the trial court can enter a modified judgment not exceeding the amount demanded in the complaint. Alternatively, plaintiff may amend her complaint to increase the amount of damages she is seeking, which will vacate defendants’ default judgment.

Bergstein v. Stroock and Stroock and Lavan LLP (May 8, 2015) WL 2163622

Facts:
David Bergstein and affiliated business entities (“plaintiffs”) were involved in acquiring, producing and distributing motion pictures. These activities required the involvement of entities and individuals willing to provide financing. David Molner and his entities (“Molner”) participated in financial transactions relating to plaintiffs’ film production and distribution business, making a series of loans to plaintiffs from 2007 to 2009. The business relationship declined and led to litigation. Molner hired the law firms Stroock and Stroock and Lavan LLP (“Stroock”) and Levene Neale Bender Yoo & Brill LLP (“Levene”) to represent him.

In late 2009, Bergstein had a fee disagreement with his long time attorney, Susan Tregub. Tregub later began representing Molner. Bergstein sued Tregub for breach of fiduciary duty and professional negligence. Bergstein sued Stroock and Levene for aiding and abetting Tregub’s breach of fiduciary duty, interference with contractual relations and prospective economic advantage, and unjust enrichment.

Stroock and Levene filed a special motion to strike under the anti-SLAPP statute, contending all of Bergstein’s claims stemmed from their protected activity of filing litigation. The trial court granted the motion and awarded attorney fees in favor of the defendant law firms.

Holding:
The Court of Appeal upheld the trial court’s order granting the anti-SLAPP motion to strike and awarding $150,222.64 in attorney fees to defendants. The Court rejected plaintiffs’ contention his claims did not arise from protected activity. The critical issue was whether plaintiffs’ cause of action was based on an act in furtherance of the defendant law firm’s right of petition or free speech.

Here, the law firms’ litigation activities were at the core of plaintiffs’ claims. Those claims arose from protected activity within the meaning of the anti-SLAPP statute. The disputed conduct was the defendant law firms’ receipt and use of confidential information to prepare for and prosecute litigation against plaintiffs.

The Court also concluded plaintiffs failed to show a probability of prevailing on their claims. Plaintiffs’ claims were barred as a matter of law, both by the litigation privilege and the statute of limitations. The defendant law firms established all the elements necessary to assert the litigation privilege because plaintiffs’ claims hinged on communicative activities of counsel in anticipation of judicial proceedings. Furthermore, plaintiff failed to file suit within the one year statute of limitations period under Code of Civil Procedure section 340.6.

ABOUT THE AUTHOR: Kelly Denham graduated from Loyola Law School in 2012. Ms. Denham’s primary focus at Tyson & Mendes is construction defect litigation. Contact Kelly at 858.263.4117 or kdenham@tysonmendes.com.

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