Opinion
D069206
12-22-2017
CLARK E. SMITH, Plaintiff and Appellant, v. SHARP HEALTHCARE et al., Defendants and Respondents. CLARK E. SMITH, Plaintiff and Respondent, v. SHARP HEALTHCARE et al., Defendants and Appellants.
Williams Iagmin and Jon R. Williams for Plaintiff, Appellant and Respondent Clark E. Smith. Procopio, Cory, Hargreaves & Savitch and Richard D. Barton, Shelley A. Carder, Natalie V. Mueller for Defendants, Appellants and Respondents, Sharp Healthcare, et al.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2013-00038726-CU-OE-CTL) Smith v. Sharp health CONSOLIDATED APPEALS from a judgment and an order of the Superior Court of San Diego County, Judith F. Hayes, Judge. Affirmed. Williams Iagmin and Jon R. Williams for Plaintiff, Appellant and Respondent Clark E. Smith. Procopio, Cory, Hargreaves & Savitch and Richard D. Barton, Shelley A. Carder, Natalie V. Mueller for Defendants, Appellants and Respondents, Sharp Healthcare, et al.
Clark E. Smith, M.D., a psychiatrist, was medical director at Sharp McDonald Center, a chemical dependency recovery hospital. After his two-year contract term ended and the contract was not renewed, he filed a complaint with the California Department of Fair Employment and Housing, which issued him a right to sue letter. In his lawsuit, he alleged two separate retaliation claims against Sharp Healthcare, Sharp Memorial Hospital and Sharp Mesa Vista Hospital (collectively "Sharp Healthcare"), one arising under the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.), and another under Health and Safety Code section 1278.5.
Statutory references are to the Health and Safety Code unless otherwise stated.
Under the FEHA claim, Dr. Smith alleged he reasonably believed that Sharp Healthcare's director of ancillary services, Daniel Valentine, Ph.D., subjected Sharp McDonald Center female staff members to unlawful discrimination and harassment based on their sex. Dr. Smith alleged he reported the incidents to Dr. Valentine and his supervisors in November 2011 to no avail, and Sharp Healthcare retaliated against him by refusing to renew his contract.
Under the section 1278.5 retaliation claim, Dr. Smith alleged that in December 2011, he reported to Sharp Healthcare certain unsafe patient care practices at Sharp McDonald Center. He specifically alleged that Dr. Valentine, a psychologist and not a physician, was setting patient admission policies for patients under prescription medications without consulting Dr. Smith as the medical director. Dr. Smith also alleged Sharp McDonald Center failed to maintain sufficient staff counselors to provide for the patients' needs. He furthermore alleged Sharp Healthcare's policies allowed for administrative discharge of patients without their treating doctor's approval or the medical director's knowledge. In January 2012, he reported those same conditions to the California Medical Board.
After all parties submitted their evidence to the jury, the court directed a verdict in Sharp Healthcare's favor on the FEHA cause of action. The section 1278.5 action was submitted to the jury, which returned a verdict for Sharp Healthcare.
Dr. Smith appeals, contending the court erred by directing a verdict because he had presented sufficient evidence to support his FEHA claim. Dr. Smith also contends the court misinstructed the jury that for him to prevail on his retaliation claim under section 1278.5, his reporting was required to be a "substantial motivating reason" for the defendants' adverse employment action; further, the same standard was erroneously included in the special verdict form. Sharp Healthcare also appeals, contending the court erroneously granted Dr. Smith's motion to tax costs. We affirm the judgment and order.
FACTUAL AND PROCEDURAL BACKGROUND
Bonnie Hanika Incidents
Dr. Smith complained to Sharp Healthcare executives about Dr. Valentine's alleged misconduct toward staff in November 2011. On December 9, 2011, Dr. Smith wrote a letter to Sharp Healthcare's human resources department complaining about Dr. Valentine's conduct towards Bonnie Hanika, a chemical dependency counselor employed at Sharp Healthcare. Dr. Smith mentioned that following an incident of harassment, Dr. Valentine "went through an arbitration process approximately [six] years ago." In the same e-mail, Dr. Smith alluded to a separate 2007 incident in which Dr. Valentine began to "overtly bully and harass Ms. Hanika in retaliation for her filing a complaint." Dr. Smith continued: "When this was brought to my attention, I expressed disagreement with this tactic. From that point on, [Dr. Valentine] has been hostile toward me, in what I consider to be clear retaliation against me. He continued retaliation against Bonnie Hanika until she finally resigned her position as lead counselor, although her functional responsibilities did not change, and she continued to provide supervision to the other counselors." Dr. Smith did not state in that e-mail his belief Dr. Valentine's conduct was based on discrimination.
Dr. Smith testified that following the April 2007 incident involving Hanika, he criticized Dr. Valentine, who responded by "yelling into [Dr. Smith's] face," telling him he did not know what he was talking about and did not have a right to criticize Dr. Valentine. When Dr. Smith was leaving the facility, Dr. Valentine followed him and continued screaming.
The David Enders Incident
In the same December 2011 e-mail, Dr. Smith reported an October 2011, incident involving David Enders, a chemical dependency counselor at Sharp McDonald Center, whom Dr. Valentine had "threatened with firing and insulted with derogatory comments." Dr. Smith wrote: "As a consequence of this, Mr. Enders appeared to be physically and emotionally shaken. This was noted as well by his fellow counselors. Mr. Enders described the hostility and abuse to me in detail as described above. Obviously, this conduct makes employees uncomfortable about being at work. Mr. Enders resigned his full-time position in reaction to this harassment, and other employees feel extremely uncomfortable secondary to this and other incidents."
Enders testified he spoke to Dr. Smith about that incident, but not to human resources, despite their repeatedly asking if he had anything to report. Enders did not have any other problems with Dr. Valentine. To the contrary, in 2009 or 2010, Dr. Valentine helped Enders obtain a grant scholarship to pursue his degree, and helped him earn a pay increase. When Enders stopped working at the facility in January 2012, he and Dr. Valentine parted amicably. Dr. Valentine testified he was aware Enders was in recovery from chemical dependency.
At trial, defense counsel asked Dr. Smith, "Did you ever tell anyone that you believed that the episode between Daniel Valentine and David Enders was because of David Enders's status as in recovery?" Dr. Smith replied: "I'm trying to recall because I had multiple different conversations about that. I expected that [h]uman [r]esource management would talk to me, but they never did so the answer is no." When asked whether he ever told Kathi Lencioni, Sharp Medical Center's chief executive officer, that Dr. Valentine's conduct was discriminatory against a protected class, Dr. Smith said, "I believe that I did." But Dr. Smith failed to mention what he had told Lencioni, if anything, on this point; rather, he mentioned three dates on which he had met with Lencioni. Dr. Smith said he waited four years after the second Hanika to report these problems with Dr. Valentine because he "felt ashamed" and "wanted to work it out on [his] own."
Dr. Smith testified that in January 2012, he met with Dr. Michael Plopper, Sharp Behavioral Health Services' vice-president, Lencioni, and Dr. Valentine. Dr. Plopper criticized Dr. Smith at the meeting for "acting out" because he did not agree with Dr. Valentine changing the "72-hour rule" requiring that would-be patients at Sharp McDonald Center abstain from consuming mind-altering substances in the 72 hours before hospital admission.
Dr. Smith testified that following subsequent meetings with Lencioni, Dr. Plopper and Dr. Valentine, he got the impression Sharp Healthcare would take no corrective action because the authorities had not talked to Hanika or addressed his concerns. Later, Lencioni reviewed Dr. Smith's employment contract with him, listing its provisions for terminating his employment. She highlighted a clause stating he was required to cooperate fully with the administrator otherwise she could let his contract expire.
With respect to his section 1278.5 retaliation claim, Dr. Smith testified that on January 31, 2012, he filed a complaint with the California Department of Public Health regarding the 72-hour rule. Dr. Smith also complained about Dr. Valentine's "pattern of bullying, harassing employees, retaliating in response to complaints and threatening behaviors," which impacted the number of counselors at Sharp McDonald Center.
Dr. Smith testified that he asked Lencioni for permission to work at Bay Recovery, which was not a hospital for chemical dependency recovery, but doctors' offices for patients with pain issues and three group homes for patients to stay overnight. Lencioni agreed on condition Dr. Smith not divert Sharp Healthcare patients to that facility. Dr. Smith testified he discussed renewing his employment contract at Sharp McDonald Center with Lencioni, but despite her promise to respond, she never did. Previously, when Dr. Smith's contract was set to expire, he would receive a proposed new one approximately two weeks earlier and he would sometimes discuss its terms with Lencioni.
Lencioni testified on behalf of the defense that after January 2012, she believed Dr. Smith was not interested in staying at Sharp McDonald Center because he was not participating in discussions regarding the admission policy and he had started working at Bay Recovery, a "competing organization." Dr. Smith also seemed focused on Dr. Valentine's removal from the hospital. Dr. Smith told Lencioni he would resign his position in exchange for 24 months' severance pay. At the end of March 2012, Sharp Healthcare did not renew Dr. Smith's contract.
Thomas McConkey from the California Department of Public Health's licensing and certification division testified he visited the facility and found no deficiencies. Dr. Smith's complaints about retaliation and harassment were outside his department's purview.
Directed Verdict Motion
Sharp Healthcare moved for a directed verdict on the FEHA retaliation cause of action, arguing Dr. Smith had not adduced sufficient evidence that Dr. Valentine had harassed Hanika on the basis of either her sex and or a perceived disability of her as someone in recovery, or harassed Enders on the basis of the same perceived disability. Dr. Smith's counsel opposed the motion, relying on a leading California Supreme Court case regarding retaliation under FEHA, Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042 (Yanowitz).
The court granted the motion, concluding Dr. Smith had not put Sharp Healthcare on notice regarding gender bias; rather, "if anything, [Dr.] Valentine would seem to be, according to [Dr. Smith's] perspective, an equal opportunity abuser" who was harsh to men and women. The court also concluded no evidence was presented that either Hanika or Enders was discriminated against based on perceptions of them as persons in recovery. The case proceeded to a jury trial on the section 1278.5 claim.
Jury's Special Verdict
The jury found true by special verdict that (1) Dr. Smith complained to Sharp Healthcare "about unsafe patient care or patient conditions at the Sharp McDonald Center"; (2) Sharp Healthcare "discriminat[ed] or retaliat[ed] against him resulting in an adverse action"; however (3) Dr. Smith's complaints were not a "substantial motivating reason for the adverse action taken against [him]."
DISCUSSION
I. No Error in Directing the Verdict
To prevail on his appellate contention that the court erroneously directed the verdict, Dr. Smith must show that he presented sufficient evidence Sharp Healthcare retaliated against him for reporting a reasonable belief that Dr. Valentine engaged in discriminatory conduct against Hanika and Enders in violation of FEHA. A. Applicable Law
A motion for a directed verdict "is in the nature of a demurrer to the evidence." (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 629-630 (Howard).) Thus, in determining such a motion, a trial court may not weigh the evidence or judge the credibility of witnesses. (Howard, supra, 72 Cal.App.4th at pp. 629-630.) All conflicts must be resolved and inferences drawn in appellant's favor. The judgment will be reversed if there is substantial evidence tending to prove all elements of the appellant's case and if the law supports that claim. (North Counties Engineering, Inc. v. State Farm Gen. Ins. Co. (2014) 224 Cal.App.4th 902, 920.) However, substantial evidence is not synonymous with any evidence. (Frank v. County of Los Angeles (2007) 149 Cal.App.4th 805, 816 (Frank).) An inference may not be based on speculation or surmise. (Id. at pp. 816-817.) An inference also may not stand if it is unreasonable in light of the whole record, or if it is rebutted by " 'clear, positive and uncontradicted evidence' " that is not subject to any reasonable doubt. (Id. at p. 817, quoting McRae v. Department of Corrections and Rehabilitation (2006) 142 Cal.App.4th 377, 389.) Because the trial court does not act as a factfinder in granting a directed verdict, the standard of review on appeal is de novo. (Davis v. Farmers Ins. Exchange (2016) 245 Cal.App.4th 1302, 1331, fn. 19.)
To establish a prima facie case of retaliation under FEHA, the employee must show " '(1) he or she engaged in a "protected activity," (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activity and the employer's action.' " (Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, 1020, quoting Yanowitz, supra, 36 Cal.4th 1028, 1042.)
The reasonableness of the plaintiff's belief that an unlawful employment practice occurred must be assessed according to an objective standard. "To meet his burden on this issue, '[a] plaintiff must not only show that he subjectively (that is, in good faith) believed that his employer was engaged in unlawful employment practices, but also that his belief was objectively reasonable in light of the facts and record presented. The objective reasonableness of an employee's belief that his employer has engaged in a prohibited employment practice 'must be measured against existing substantive law.' " (Dinslage v. City and County of San Francisco (2016) 5 Cal.App.5th 368, 381-382.)
"[A]n employee's unarticulated belief that an employer is engaging in discrimination will not suffice to establish protected conduct for the purposes of establishing a prima facie case of retaliation, where there is no evidence the employer knew that the employee's opposition was based upon a reasonable belief that the employer was engaging in discrimination." (Yanowitz, supra, 36 Cal.4th at p. 1046.) B. Analysis
Applying the above law, the court did not err in directing a verdict because Dr. Smith did not adduce sufficient evidence to make out a prima facie case of retaliation. A trier of fact could not find that Dr. Smith reasonably believed Dr. Valentine's conduct constituted unlawful discrimination to establish Dr. Smith engaged in protected conduct. Dr. Smith admitted he did not tell Sharp Healthcare he believed the Hanika or Enders incidents resulted from any perception of them as disabled. Dr. Smith merely testified Dr. Valentine knew Enders was in recovery. That knowledge did not establish causality. We point out that Enders rebuffed human resources' requests to report the incident with Dr. Valentine, thus indicating he did not regard it as serious enough to constitute discrimination. In fact, Enders later acknowledged that he learned about himself through that incident.
As to Dr. Smith's claim Dr. Valentine discriminated against Hanika based on her sex, when Dr. Smith was asked directly at trial whether he ever told Sharp Healthcare about Dr. Valentine committing discrimination against a protected group, he answered, "I believe that I did." That equivocal answer is "speculation [or] surmise" (Frank, supra, 149 Cal.App.4th at p. 816) and thus insufficient to show Dr. Smith put Sharp Healthcare on notice that Dr. Valentine was engaging in conduct prohibited by FEHA.
Moreover, Dr. Smith knew Dr. Valentine had also spoken forcefully to male employees, including Dr. Smith and Enders. Accordingly, no objective basis exists for Dr. Smith's belief that Dr. Valentine discriminated against Hanika based on her sex; that is, there was no "application of a different standard to a female employee than that applied to male employees." (Yanowitz, supra, 36 Cal.4th at p. 1028.) Therefore, even interpreting the evidence in the light most favorable to Dr. Smith, he did not engage in protected activity when he reported the Hanika and Enders incidents to Sharp Healthcare.
Dr. Smith argues it sufficed that he reasonably believed Dr. Valentine had engaged in unlawful harassment forbidden by Sharp Healthcare's policies. However, as the Yanowitz court stated, relying on case law involving federal anti-discrimination laws, such a mistake "must, of course be a sincere one; and presumably it must be reasonable . . . for it seems unlikely that the [Legislature] would have wanted to encourage the filing of utterly baseless charges by preventing employers from disciplining the employees who made them. But it is good faith and reasonableness, not the fact of discrimination, that is the critical inquiry in a retaliation case." (Yanowitz, supra, 36 Cal.4th at p. 1043, fn. 4.)
Any mistake Dr. Smith made about whether Dr. Valentine's conduct constituted harassment based on a prohibited or discriminatory ground was not reasonable. Dr. Smith delayed four years in reporting the 2007 incident to Sharp Healthcare despite Dr. Smith's testimony that immediately after the incident he confronted Dr. Valentine about it. Further, it is unreasonable to think that Dr. Smith, as the medical director of a facility whose primary objective is to help patients with chemical dependency, would wait four years to address harassment or discrimination against such individuals.
II. Claims of Instructional Error
Dr. Smith contends the court erroneously and confusingly instructed the jury with two different standards for causation. As explained below, in advancing this claim, Dr. Smith has confused a standard for dealing with the production of evidence with a standard for prevailing on the section 1278.5 retaliation claim.
First, the court's the jury instruction regarding the substantive offense stated that to prove the section 1278.5 retaliation claim, Dr. Smith's complaints of unsafe patient care or patient conditions or both were required to be a "substantial motivating reason" for the alleged retaliation, which a separate instruction given, CACI No. 2507, defined as "a reason that actually contributed to the adverse action. It must be more than a remote or trivial reason. It does not have to be the only reason motivating the adverse action."
Second, the court instructed the jury about a rebuttable evidentiary presumption tracking the language of section 1278.5, subdivision (d)(1): "If Plaintiff persuades you by a preponderance of the evidence that he lodged a complaint with the Defendant(s) concerning patient safety or conditions at a medical facility within 120 days of an adverse action, then you are to presume that this complaint was a motivating reason for the adverse action, unless Defendant persuades you by a preponderance of the evidence either that there was no adverse action or that if there was an adverse action that this action was not made in retaliation or discrimination for the Plaintiff's complaint." (Italics added.) A. Applicable Law
"[T]here is no rule of automatic reversal or 'inherent' prejudice applicable to any category of civil instructional error, whether of commission or omission. A judgment may not be reversed for instructional error in a civil case 'unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.' (Cal. Const., art. VI, § 13.) . . . [¶] Instructional error in a civil case is prejudicial 'where it seems probable' that the error 'prejudicially affected the verdict.' " (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580.)
Section 1278.5 subdivision subd. (b)(1)(A) bars a health facility from discriminating or retaliating in any manner, against any patient, employee, member of the medical staff, or any other health care worker of the health facility because that person has "[p]resented a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity." Whistleblower protection is also extended to one who has "initiated, participated, or cooperated in an investigation or administrative proceeding related to, the quality of care, services, or conditions at the facility that is carried out by an entity or agency responsible for accrediting or evaluating the facility or its medical staff, or governmental entity." (§ 1278.5, subd. (b)(1)(B).) B. Analysis
We conclude the court did not err by instructing the jury that Dr. Smith's complaints regarding unsafe patient care, or patient conditions, or both, were required to be a substantial motivating reason for the nonrenewal of his contract. The court's separate instruction clarifying the definition of "substantial motivating" reason makes clear it simply means a reason that is not remote or trivial.
CACI No. 4606, which was promulgated during the pendency of this appeal and specifically applies to whistleblower actions under section 1278.5, is helpful. It provides that a plaintiff alleging retaliation for reporting to a governmental entity regarding the quality of care, services, or conditions at a healthcare facility must prove that his complaint "was a substantial motivating reason for" the employer's adverse action. We previously granted Sharp Healthcare's motion for judicial notice of a copy of CACI No. 4606. We may take judicial notice of the wording of the CACI publication, as it is not reasonably subject to dispute. (Evid. Code, § 452, subd (h).) CACI instructions are approved by the Judicial Council as "the official instructions for use in the state of California." Where CACI contains an instruction applicable to a case, its use "is recommended" unless a different instruction "would more accurately state the law and be understood by jurors." (California Rules of Court, rule 2.1050(a), (e).)
CACI No. 4606 is in accordance with the language used in other CACI instructions dealing with retaliatory claims based on related statutes. Specifically, for violations of Labor Code section 6310, which prohibits employers from discharging in a retaliatory manner employees who complain to government agencies about employee safety or health, CACI No. 4605 requires the plaintiff to prove that his or her complaint was a substantial motivating reason for the employer's adverse action against the plaintiff. Likewise, for violations of Government Code section 12653, which prohibits an employer from discharging an employee for pursuing a false claim action, CACI No. 4600 provides that to establish a claim the plaintiff must prove that his or her acts in furtherance of a false claims action were a "substantial motivating reason" for the employer's decision.
Caselaw dealing with related statutes is also in accord. (See Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 232 [holding in the context of a FEHA disparate treatment/discrimination instruction claim, "Requiring the plaintiff to show that discrimination was a substantial motivating factor, rather than simply a motivating factor, more effectively ensures that liability will not be imposed based on evidence of mere thoughts or passing statements unrelated to the disputed employment decision"]; Alamo v. Practice Management Information Corporation (2013) 219 Cal.App.4th 466, 469-470 [holding that "the trial court prejudicially erred in instructing the jury with the former versions of CACI Nos. 2430, 2500, 2505, and 2507 because the proper standard of causation in a FEHA discrimination or retaliation claim is not 'a motivating reason,' as used in the [former] CACI instructions, but rather 'a substantial motivating' reason, as set forth in Harris."].)
The second challenged instruction is based on section 1287.5, subd. (d)(1), which states: "There shall be a rebuttable presumption that discriminatory action was taken by the health facility, or by the entity that owns or operates that health facility . . . in retaliation against an employee, member of the medical staff, or any other health care worker of the facility, if responsible staff at the facility . . . had knowledge of the actions, participation, or cooperation of the person responsible for any acts described in paragraph (1) of subdivision (b), and the discriminatory action occurs within 120 days of the filing of the grievance or complaint by the employee, member of the medical staff or any other health care worker of the facility." Section 1278.5, subdivision (e) clarifies that the statute's presumptions shall affect the burden of producing evidence as provided in Evidence Code section 603.
Evidence Code section 603 provides: "A presumption affecting the burden of producing evidence is a presumption established to implement no public policy other than to facilitate the determination of the particular action in which the presumption is applied." Evidence Code section 604 establishes how the presumption operates: "The effect of a presumption affecting the burden of producing evidence is to require the trier of fact to assume the existence of the presumed fact unless and until evidence is introduced which would support a finding of its nonexistence, in which case the trier of fact shall determine the existence or nonexistence of the presumed fact from the evidence and without regard to the presumption." Accordingly, "when the party against whom such a presumption operates produces some quantum of evidence casting doubt on the truth of the presumed fact, the other party is no longer aided by the presumption. The presumption disappears, leaving it to the party in whose favor it initially worked to prove the fact in question." (Rancho Santa Fe Pharmacy, Inc. v. Seyfert (1990) 219 Cal.App.3d 875, 882.)
As stated in CACI No. 4606's use notes, that presumption affects only the burden of producing evidence; "[t]herefore, unless there is no such evidence, the jury should not be instructed on the presumptions." Here, the instruction became inapplicable, and therefore the court erred by giving it, because the presumption disappeared after Sharp Healthcare adduced rebuttal evidence showing that some of Dr. Smith's complaints fell outside the 120-day period. His complaints started around November 2011, and his contract did not expire until the end of March 2012. However, any error was harmless because Dr. Smith benefitted by that instruction's inclusion of the lower causation standard of "motivating reason" instead of "substantial motivating reason."
III. Special Verdict Form
Our analysis of the claimed instructional error applies to Dr. Smith's challenge of the use of the "substantial motivating reason" standard in question three of the special verdict form. We conclude the court did not err by using that standard. We agree with Sharp Healthcare that the error in the special verdict form was in question number two, which erroneously asked the jury, "Did [Sharp Healthcare] discriminate or retaliate against [Dr. Smith] resulting in an adverse action?" Such phrasing equates an adverse employment action with discrimination and retaliation. A better phrasing would have been that submitted by Sharp Healthcare, which the trial court rejected: "Did [Sharp Healthcare] refuse to renew [Dr. Smith's] Medical Director Services Agreement?" Question three made it clear there can be no retaliation absent a finding that Dr. Smith's complaint was a substantial motivating reason for the adverse action.
IV. The Court Did Not Err by Granting the Motion to Tax Costs
Sharp Healthcare contends the court erred by granting Dr. Smith's motion to tax costs because his FEHA cause of action was unreasonable, frivolous, meritless and vexatious, as shown by the court's decision to direct the verdict. Sharp Healthcare adds that the court should have awarded its costs, including expert witness fees, that were clearly attributable to the separate section 1278.5 claim. Sharp Healthcare also contends: "The FEHA policy rationale . . . is not served by granting the motion to tax costs with regard to costs arising solely from the defense of the allegation of retaliation under Section 1278.5 and the fees and costs sought are authorized by Code of Civil Procedure Sections 998 and 1032." A. Background
Sharp Healthcare moved for $68,382.38 in costs, including those permitted by Dr. Smith's failure, over one year before trial, to accept Sharp Healthcare's statutory offer to compromise pursuant to Code of Civil Procedure Section 998 in the amount of $25,000. Dr. Smith moved to tax costs. Sharp Healthcare opposed the motion. The court ultimately granted the motion and struck Sharp Healthcare's costs memorandum in its entirety, citing Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97 (Williams) and Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1057-1058 (Roman) for its conclusion Dr. Smith's lawsuit "was not objectively without foundation when brought, and the action did not become objectively without foundation during the pendency of the action."
The court denied Sharp Healthcare's motion for reconsideration of its ruling, in which it sought $27,991.25 for defending the section 1278.5 claim, pointing out that in its earlier ruling it had relied on Roman, "which provides that if non-FEHA claims are not severable from the FEHA claims, the court is not required to award any costs or fees to defendant." B. Applicable Law
"The trial court's exercise of discretion in granting or denying a motion to tax costs will not be disturbed if substantial evidence supports its decision." [Citation.] To the extent the statute grants the court discretion in allowing or denying costs or in determining amounts, we reverse only if there has been a " 'clear abuse of discretion' and a 'miscarriage of justice.' " (Chaaban v. Wet Seals, Inc. (2012) 203 Cal.App.4th 49, 52.)
"[T]he general rule pursuant to [Code of Civil Procedure] section 1032, subdivision (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, 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.)
The United States Supreme Court ruled in the context of federal civil rights actions that different standards apply to awards of attorney fees to prevailing plaintiffs than to prevailing defendants, holding that a plaintiff "should not be assessed his opponent's attorney's fees unless a court finds that his claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so." (Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, 422.) The court explained that the purpose of the fee provision was to make it easier for a plaintiff of limited means to bring a meritorious suit. (Id. at p. 420.) It concluded that to award fees to a defendant simply because the plaintiff was ultimately unsuccessful "would substantially add to the risks inhering in most litigation and would undercut the efforts of Congress to promote the vigorous enforcement" of the civil rights statutes. (Id. at p. 422.)
The California Supreme Court has extended that ruling to costs, holding: "[T]he Christiansburg standard applies to discretionary awards of both attorney fees and costs to prevailing FEHA parties under Government Code section 12965[, subdivision] (b). To reiterate, under that standard a prevailing plaintiff should ordinarily receive his or her costs and attorney fees unless special circumstances would render such an award unjust. [Citation.] A prevailing defendant, however, should not be awarded 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." (Williams, supra, 61 Cal.4th at p. 115.) C. Analysis
We conclude the court did not abuse its discretion in granting the motion to tax costs based on its finding Dr. Smith's complaint was not objectively without foundation when brought, nor did he pursue litigation after it became obvious that the alleged retaliation was nonexistent. The jury apparently believed the lawsuit had minimal merit, because although it ultimately decided Sharp Healthcare's adverse action against him was not a substantial motivating cause of the adverse action, it answered in the affirmative the special verdict question—that we have deemed improper—of whether Sharp Healthcare discriminated or retaliated against Dr. Smith resulting in an adverse action. Therefore, we cannot conclude that Dr. Smith's complaint was objectively without foundation.
Moreover, we conclude that under Roman, supra, 237 Cal.App.4th 1040, Dr. Smith's two retaliation claims were sufficiently "intertwined and inseparable" (id. at p. 1059) that it was not possible to apportion costs between them. As noted, Dr. Smith in his complaint to the Department of Public Health alleged Sharp Healthcare's wrongdoing regarding his FEHA claim and the section 1278.5 claim. Both claims focused on Dr. Valentine's conduct and Sharp Healthcare's response; therefore, the costs incurred in defending both actions are inseparable.
To the extent Sharp Healthcare contends the court erred by failing to award it its postoffer costs based on Dr. Smith's rejection of its Code of Civil Procedure section 998 offer, that claim fails under the Court of Appeal's decision in Mangano v. Verity, Inc. (2008) 167 Cal.App.4th 944, 951, which applied the Christiansburg standard to section 998 offers. Because we have concluded Dr. Smith's complaint was not without any legal or factual foundation, it follows that the court did not err by granting the motion to tax costs.
DISPOSITION
The judgment and order are affirmed. Each party is to bear its own costs on appeal.
O'ROURKE, J. WE CONCUR: BENKE, Acting P. J. NARES, J.