Opinion
A129427 A130063
12-12-2011
NIMACHIA HERNANDEZ, Plaintiff and Appellant, v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. RG06272564)
Appellant Nimachia Hernandez sued respondent Regents of the University of California after she was terminated as an assistant professor. She prevailed at trial on some, but not all, of her claims. Appellant argues that the trial court erred when it denied her posttrial motion for an order reinstating her as a professor, because there was an insufficient showing that reinstating her would be infeasible. Appellant also argues that the trial court abused its discretion by not awarding her more attorney fees as a prevailing plaintiff, and in awarding respondent some of its costs (including its expert witness fees). We affirm.
I.
FACTUAL AND PROCEDURAL
BACKGROUND
Appellant, who is Native American, was appointed as an assistant professor in the Department of Ethnic Studies at the University of California, Berkeley (the University), beginning on July 1, 2000.
According to the pleadings (there is scant evidence regarding the incident in the record), appellant suffered severe injuries in an automobile accident on July 22, 2003, and she was out on medical leave for several months. She was later diagnosed with a traumatic brain injury and other medical issues, according to her complaint. Appellant alleged that she was unable to return to work in February 2004, even though she was requested to do so. She further alleged that she requested accommodations to address her physical limitations, but that the University repeatedly ignored her requests.
The University had planned to conduct a mid-career review for appellant in the fall of 2003; however, the review was delayed in order to accommodate appellant's medical needs, according to the University. The review eventually took place in the spring of 2005, but it covered only the period July 2000 through June 2003 (before the date of appellant's automobile accident).
A review dated April 5, 2005, concluded that although appellant's teaching evaluations were "very positive" and she contributed "commendable service" to the Department of Ethnic Studies, there was a "complete lack of evidence of research, scholarly productivity and/or creative work" by appellant during the relevant time period. An appraisal committee concluded that there was "insufficient evidence to merit anything but a negative assessment of [appellant's] mid-career review" and that the likelihood that appellant would achieve tenure was "poor." A letter to Vice Provost Jan De Vries from the dean of social services dated May 25, 2005, stated that appellant's prospects for tenure were not good, and he recommended that appellant be offered a "terminal, one-year contract." An ad hoc committee that reviewed appellant's case, and the process used to evaluate her, concluded that appellant's mid-career review was conducted fairly and that a terminal one-year appointment was appropriate. By letter dated August 19, 2005, appellant received a 12-month notice of termination, informing her that her appointment as assistant professor would end on August 18, 2006, and that the appointment would not be renewed beyond that date.
On May 31, 2006, appellant filed a complaint against respondent, alleging violations of the California Fair Employment and Housing Act (FEHA). (Gov. Code, § 12900 et seq.) She alleged discrimination based on a disability in violation of the FEHA, retaliation for opposing discrimination in violation of the FEHA, and failure to prevent discrimination and retaliation in violation of the FEHA. She later amended her complaint to include a cause of action for discrimination based on national origin and ancestry in violation of the FEHA.
On July 16, 2008, respondent served appellant with an offer to compromise pursuant to Code of Civil Procedure section 998 in the amount of $300,000, plus reasonable attorney fees, costs, and expenses to date. Appellant did not accept the offer, and the matter proceeded to a jury trial. The record on appeal does not include a transcript of any trial testimony, and only some of the exhibits admitted at trial are included in the appellate record. The jury was instructed (at appellant's request) that she could be awarded both past lost earnings (back pay) and future lost earnings as damages. Using a special verdict form, the jury concluded that the University failed to engage in good faith in the interactive process, that the University retaliated against appellant for demanding a reasonable accommodation, and that the University failed to take reasonable steps to prevent the foregoing from occurring. However, the jury concluded that respondent did not discriminate against appellant based on her national origin or her disability, and that respondent did not fail to reasonably accommodate her. The jury awarded appellant $176,347 in economic loss and $90,000 in noneconomic loss. This award was less than what respondent had offered to settle the case before trial. Respondent does not challenge the jury's verdict on appeal.
All statutory references are to the Code of Civil Procedure unless otherwise specified.
Following trial, appellant filed a motion for injunctive relief. She sought reinstatement to the faculty of the University with tenure (or, in the alternative, without tenure) or an award of front pay. Respondent opposed the motion for injunctive relief. It submitted e-mails that appellant had sent while still a professor at the University, stating that the review of her work status was "fraudulent, illegitimate, and retaliatory," that she was being "treated with hostility" for requesting accommodations for her disability, that the University administration's lack of support for the Native American studies program contributed to the "genocide" of the program, and that forcing her out of the University would be part of an "ethnic cleansing process."
The trial court denied appellant's motion for injunctive relief. The court concluded that reinstatement would interfere with the University's power to operate, control, and administer its affairs granted by article IX, section 9 of the California Constitution (San Francisco Labor Council v. Regents of University of California (1980) 26 Cal.3d 785); the evidence submitted demonstrated that the University had reasonable grounds for not granting appellant tenure, and for not retaining her as an assistant professor; and reinstatement to any position would not be feasible because of the animosity between appellant and members of the University, both before and as a result of the instant litigation. The court further concluded that appellant was not entitled to front pay (money awarded for lost compensation during the period between judgment and reinstatement, or as a substitute for reinstatement), because there was sufficient evidence showing that appellant was not entitled to reinstatement, such as her lack of qualifications and failure to meet University standards and expectations for scholarly and creative production. The trial court concluded that the jury's award of $176,347 in economic damages ($1 more than what appellant requested in past economic damages) compensated appellant for lost earnings from the date of termination to the date of trial, and the total jury award of $266,347 to compensate for economic and noneconomic loss was sufficient to make appellant whole. The court's denial of appellant's motion was "based on the record and evidence submitted at trial and for th[e] motion [for injunctive relief]."
Appellant thereafter sought $2,662,645 in attorney fees and $46,312.82 in costs pursuant to Government Code section 12965, subdivision (b). Respondent opposed appellant's motion for attorney fees, arguing that the fees requested were excessive. Respondent also filed a motion to tax costs, arguing that, pursuant to section 998, appellant was not entitled to her costs after the date of respondent's offer to compromise.
Respondent filed a motion to recover its own costs pursuant to section 998, subdivision (c), which permits a defendant to recover costs incurred after a pretrial offer to compromise, if plaintiff proceeds to trial and fails to recover a more favorable judgment. Respondent sought a total of $144,560.74, which included $111,146.50 in expert witness fees. Appellant filed a motion to tax costs.
Following hearings on both parties' motions regarding attorney fees and costs, the trial court issued an order addressing all requests. The trial court awarded appellant $415,938.75 (with a 1.5 multiplier) for reasonable attorney fees. This award represented 211.9 hours expended by one of appellant's attorneys (Dan Siegel) at $500 per hour, 680.3 hours expended by a second attorney (Anne Weills) at a rate of $400 per hour, and 302.95 hours expended by a paralegal (Elizabeth Johnson) at a rate of $125 per hour. The court awarded appellant $26,932.84 for costs incurred before respondent's section 998 offer to compromise.
As for respondent's costs, the trial court awarded respondent $33,414.25 in costs incurred after its section 998 offer to compromise. The court also awarded respondent $50,000 in expert witness fees, which was "scaled down" from respondent's original request of more than $111,000, in light of appellant's financial situation.
Appellant timely appealed from the judgment that followed the order denying her motion for injunctive relief, which is the subject of A129427. Appellant also timely appealed from the trial court's order on the motions for attorney fees and costs, which is the subject of A130063. On our own motion, we consolidated the two appeals for purposes of oral argument and decision.
Before consolidation, respondent filed motions in both appeals to interplead the amount of judgment, and this court denied both motions without prejudice to respondent filing an interpleader action in the trial court (§ 386).
II.
DISCUSSION
A. Inadequate Record to Evaluate Denial of Injunctive Relief.
In A129427, appellant challenges the denial of her request to be reinstated or, in the alternative, that she be awarded front pay. "[C]ourts can, and often do, issue injunctions prohibiting the recurrence or continuation of employment discrimination. [The California Supreme Court] ha[s] held 'that, in a civil action under the FEHA, all relief generally available in noncontractual actions . . . may be obtained.' [Citation.] This includes injunctive relief. [Citation.]" (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132 (Aguilar); see also Norton v. San Bernardino City Unified School Dist. (2008) 158 Cal.App.4th 749, 761 [generally, order compelling reinstatement to former position should include restoration of former duties and responsibilities].) "The grant or denial of a permanent injunction rests within the trial court's sound discretion and will not be disturbed on appeal absent a showing of a clear abuse of discretion." (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 390 (Horsford).)
Appellant first argues that in order to be made whole, she must be reinstated as a faculty member at the University, and that there is insufficient evidence to support the trial court's finding that hostility between her and members of the University would make reinstatement infeasible. (Cassino v. Reichhold Chemicals, Inc. (9th Cir. 1987) 817 F.2d 1338, 1347 [reinstatement may be inappropriate where hostility exists between employee and employer].) However, by electing not to provide a reporter's transcript of the trial proceedings, appellant has provided an inadequate record to evaluate this claim. (Aguilar, supra, 21 Cal.4th at p. 132 [court could not evaluate claim that defendant did not use certain language where no reporter's transcript of trial proceedings provided].) The register of actions reveals that trial began in August 2009 and continued over several weeks, until the jury reached its verdict on September 25. Although some of the exhibits admitted at trial are included in the record on appeal, this court has no way of knowing how various witnesses testified about those exhibits, or about any of the other issues that appellant raises on appeal. For example, appellant claims that five members of the University's ethnic studies faculty testified at trial, but that none of them taught Native American studies, and that only one of them "indicated any hostility towards Appellant." Absent a reporter's transcript of the five witnesses' testimonies at trial, it is impossible to evaluate the accuracy of this statement. It is likewise impossible to evaluate appellant's claim that two former chairs of the University's ethnic studies department testified at trial that they "b[ore] no ill will towards Appellant."
Appellant claims that the trial court ruled on her motion for injunctive relief based on the briefs that summarized the evidence, and that she is not required to provide the underlying evidence to which the parties referred in their briefs, or the evidence to which the trial court referred in its order denying injunctive relief. This argument ignores the established rule that it is appellant's affirmative obligation to provide an adequate record so that we may assess whether the trial court abused its discretion. (Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447 (Vo).) " ' "A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error." [Citation]' [Citations.] 'A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed.' [Citations.]" (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416 (Gee), original italics.)
Appellant apparently also contends that the trial court did not base its decision on the trial record, as shown by the fact that its only reference to the record in its order denying injunctive relief was its erroneous "speculation" that the jury relied on various factors in making appellant whole. To the contrary, it could not be more clear that the trial court relied on the entire record (including evidence presented at trial) when ruling on appellant's motion for injunctive relief. At the hearing on the motion, the trial court questioned whether appellant was entitled to be reinstated with tenure, because "I don't think that was ever on the table or even examined factually in the proceedings as to whether or not she had gotten to the point of being evaluated for tenure," and that "I don't know that that's something [reinstatement with tenure] that even the facts of this case would allow me to do." (Italics added.) The trial court also observed that the evidence at trial "suggested that [appellant's] scholarship was so profoundly lacking that she just had no chance of making any additional progress toward tenure. That's essentially what the witnesses were saying.'" (Italics added.) Appellant's counsel also acknowledged at the hearing that the trial court would "have to look at the evidence and make its own determinations in light of the jury's verdict but also in light of the trial." (Italics added.) The order denying injunctive relief specifically stated that it was based on "the record and evidence submitted at trial and for this motion." (Italics added.)
Appellant further argues that the trial court's order violated her first amendment rights, because it impermissibly focused on her exercise of free speech when finding that there was animosity between her and other University faculty members, and that we may consider this issue because it involves the application of legal principles to evidence that was cited in the trial court's order. Even assuming arguendo that this issue was not waived by failure to raise it below (as respondent argues), and that the trial court impermissibly relied in part on constitutionally protected speech in denying appellant's motion for injunctive relief, it does not follow that the trial court abused its discretion in denying relief. That is because unless the record contradicts the trial court's order, we may presume that there was other, permissible evidence to support the trial court's conclusion that appellant's actions "created such a vitriolic and antagonistic work environment such that reinstating [appellant] to her former position would not be a viable option." (Nielsen v. Gibson (2009) 178 Cal.App.4th 318, 324 [court must conclusively presume evidence is ample to sustain trial court's findings absent reporter's transcript of trial proceedings].) Additionally, the trial court concluded that there was a separate, independent reason for denying reinstatement (apart from hostility between appellant and her former employer): appellant lacked the qualifications to hold the position.
We also reject appellant's related argument that it is unclear whether the trial court impermissibly relied on respondent's hostility over the litigation, standing alone, in denying injunctive relief. (Bruso v. United Airlines, Inc. (7th Cir. 2001) 239 F.3d 848, 862 [impermissible to deny reinstatement solely on the basis of defendant's negative reaction to litigation, or based on attorney's advocacy for plaintiff at trial].) The trial court specifically stated that there was animosity between appellant and members of the University both before and as a result of the litigation, and it cited several e-mails that predated the filing of the complaint in this action.
We further conclude that there is an inadequate record to evaluate appellant's claim that the trial court's denial of reinstatement was inconsistent with the jury's finding that the University retaliated against her for demanding a reasonable accommodation. Appellant claims that the jury found that appellant "was fired out of retaliation," and that it was therefore inconsistent for the trial court to conclude that appellant was not entitled to reinstatement as a remedy for this wrong. (Capitalization and boldface omitted.) Appellant's complaint identified several acts of alleged retaliation, including denying her the position of coordinator of Native American studies (as opposed to terminating her). The jury was instructed that in order to prove that the University retaliated against her, she was required to prove either that the she was fired or that respondent "engaged in conduct that, taken as a whole, materially and adversely affected the terms and conditions of [appellant's] employment." The special verdict form simply states that the University "retaliate[d] against [appellant] for demanding reasonable accommodation," without identifying specific acts of retaliation. The jury also found that the University did not discriminate against appellant based on her national origin or disability, suggesting that, as the trial court concluded, there were legitimate reasons for terminating her, notwithstanding any retaliatory conduct toward appellant. Absent a reporter's transcript of the trial proceedings, we are unable to evaluate appellant's claim that the denial of reinstatement was inconsistent with the jury's verdict.
For the same reason, we reject appellant's argument that the trial court erred when it declined to award her front pay as an alternative to reinstatement. "[F]ront pay is simply money awarded for lost compensation during the period between judgment and reinstatement or in lieu of reinstatement." (Pollard v. E.I. du Pont de Nemours & Co. (2001) 532 U.S. 843, 846; see also Horsford, supra, 132 Cal.App.4th at p. 388.) "In cases in which reinstatement is not viable because of continuing hostility between the plaintiff and the employer or its workers, or because of psychological injuries suffered by the plaintiff as a result of the discrimination, courts have ordered front pay as a substitute for reinstatement." (Pollard at p. 846; see also Williams v. Pharmacia, Inc. (7th Cir. 1998) 137 F.3d 944, 952 [front pay is "functional equivalent of reinstatement"].) "As a practical matter, front pay is awarded at the court's discretion only if the court determines that reinstatement is inappropriate . . . ." (Traxler v. Multnomah County (9th Cir. 2010) 596 F.3d 1007, 1012.)
The trial court concluded that reinstatement was inappropriate, but nonetheless denied front pay because there was "sufficient evidence showing that [appellant] is not entitled to reinstatement on other grounds, in particular [her] lack of qualifications and failure to meet the University's standards and expectations for scholarly and creative production." The court further concluded that the award of $176,347 in economic damages ($1 more than what she had requested for past economic loss) was sufficient to make appellant whole for her injuries. Again, absent a reporter's transcript of the trial proceedings, we cannot evaluate the basis for the trial court's findings, and presume on appeal that they are correct. (Aguilar, supra, 21 Cal.4th at p. 132; Gee, supra, 99 Cal.App.4th at p. 1416.)
Appellant devotes most of her argument regarding front pay to addressing respondent's argument below that front pay was not recoverable as equitable relief, because the jury had considered the issue of whether to award future lost earnings. She does not acknowledge that the trial court in fact rejected respondent's argument that appellant was judicially estopped from seeking front pay, but that appellant was nonetheless not entitled to it. Contrary to appellant's claim, the trial court clearly "understood the concept of front pay," as its order accurately described the purpose of such an award in appropriate cases.
Because appellant has failed to demonstrate that the trial court abused its discretion in denying her injunctive relief, we affirm the court's order in A129427.
B. Attorney Fees and Costs.
In A130063, appellant challenges various aspects of the trial court's order granting her attorney fees and costs, and granting respondent costs and expert witness fees pursuant to section 998. We separately address appellant's claims of error.
1. Reduction of hourly rates
Appellant argues that the trial court abused its discretion when it awarded attorney fees to her counsel at rates lower than those requested. A trial court has discretion to award attorney fees to the prevailing party in a FEHA action. (Gov. Code, § 12965, subd. (b); Steele v. Jensen Instrument Co. (1997) 59 Cal.App.4th 326, 331.) "[A] court assessing attorney fees begins with a touchstone or lodestar figure, based on the 'careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.' [Citation.]" (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131-1132.) In general, the reasonable hourly rate used for the lodestar calculation "is that prevailing in the community for similar work." (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) "The 'burden is on the party seeking attorney fees to prove that the fees it seeks are reasonable. [Citation.] It is also [appellant's] burden on appeal to prove that the court abused its discretion in awarding fees.' [Citation.]" (Center for Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 615.) "[A]n experienced trial judge is in a much better position than an appellate court to assess the value of the legal services rendered in his or her court . . . ." (Children's Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 782 [ample support in record for hourly rate set by trial court].)
Appellant's trial counsel sought to be reimbursed at a rate of $650 per hour for attorney Siegel, $450 per hour for attorney Weills, and $200 per hour for paralegal Johnson. Attorney Siegel submitted a declaration stating that the Fresno Superior Court had set his hourly rate at $450 in two separate cases following jury trials in 2007. He declared that he had agreed to work on this case on a contingency basis, and his September 2, 2005 fee agreement with appellant stated that his hourly rate for work done in 2005 was $500, Weills's rate was $350, Johnson's rate was $125, and those hourly rates would "likely increase each year." Attorney Weills and paralegal Johnson also submitted declarations in support of their proposed hourly rates.
Appellant is represented on appeal by a different law firm from the one that represented her in the trial court. On December 29, 2010, the law firm that represented appellant below filed a motion to dismiss A130063 in part, arguing that appellant had no interest in the trial court's award of attorney fees and costs to the law firm. This court denied the motion on January 13, 2011.
Respondent argued in its opposition that the requested hourly rates were excessive, because they were "well above the prevailing market rates for competent employment attorneys in the local community." Respondent argued that the court should set Siegel's hourly rate at $400, Weills's rate at $300, and Johnson's rate at $125. It submitted a declaration of an attorney retained as an expert in attorney fees who opined, based on a survey of employment lawyers, that the rates sought by appellant's firm did not represent the prevailing market rates for a FEHA employment discrimination action. At the hearing on the attorney fees motion, appellant's counsel argued that respondent's expert had not taken into account his knowledge, skills, or reputation. The trial court agreed and stated that it had taken into consideration counsel's reputation, skills, and what the court "thought was reasonable." The trial court set Siegel's rate at $500, Weills's rate at $400, and Johnson's rate at $125.
Appellant has not met her burden on appeal of showing that the trial court abused its discretion in setting hourly rates. She complains that the trial court appears to have relied on hourly rates cited in her fee agreement with counsel, which was dated nearly five years before the hearing on the attorney fees motion and specifically stated that rates likely would rise each year. Appellant simply ignores the evidence submitted to the trial court that supported awarding lower hourly rates. Moreno v. City of Sacramento (9th Cir. 2008) 534 F.3d 1106, upon which appellant relies, is distinguishable, because there the district court apparently had a de facto policy of awarding a certain hourly rate in civil rights cases, without taking into consideration current economic conditions in the district. (Id. at p. 1115.) Here, by contrast, the trial court specifically stated that it was taking into consideration counsel's reputation and skill, as well as what the court "thought was reasonable." On the record before us, we conclude that the trial court did not abuse its discretion in setting hourly rates.
2. No abuse of discretion in setting multiplier
Appellant also contends that the trial court abused its discretion in setting a 1.5 multiplier, instead of the 2.0 multiplier that she sought. Attorney fees may be adjusted by the court based on factors including "(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award. [Citation.]" (Ketchum v. Moses, supra, 24 Cal.4th at p. 1132.) " ' "[[A]] contingent fee contract, since it involves a gamble on the result, may properly provide for a larger compensation than would otherwise be reasonable." ' The purpose of a fee enhancement, or so-called multiplier, for contingent risk is to bring the financial incentives for attorneys enforcing important constitutional rights . . . into line with incentives they have to undertake claims for which they are paid on a fee-for-services basis." (Ibid.)
Appellant summarizes the various relevant factors and argues that those factors favored granting counsel a higher multiplier. However, as with her challenge of the denial of her motion for injunctive relief (ante, § II.A.), appellant has failed to provide an adequate record to evaluate whether the trial court abused its discretion in setting the multiplier. For example, she argues, without citation to the record, that "[m]ost of the witnesses who testified [at trial] were adverse to Appellant's position. Almost every witness in this case was a current or former employee of UC. Appellant's attorneys were required to build the case around the testimony of witnesses who contended that she did not warrant any recovery at all and spoke with the considerable authority of the University of California." Absent evidentiary support in the record for this factual assertion, this court is in no position to evaluate appellant's argument.
We also reject appellant's vague argument that the trial court erred by not awarding precomplaint attorney fees. She cites legal authority for the general proposition that a trial court may award fees incurred prior to the filing of a lawsuit where the record shows that the work was necessary to the success of the claim litigated by the party. (Webb v. Dyer County Bd. of Ed. (1985) 471 U.S. 234, 243; Best v. California Apprenticeship Council (1987) 193 Cal.App.3d 1448, 1459; see also Hogar Dulce Hogar v. Community Development Com. of City of Escondido (2007) 157 Cal.App.4th 1358, 1361.) However, appellant does not direct this court to evidence of the "internal proceedings" that supposedly were necessary to the ultimate outcome of her lawsuit, let alone specify the number of hours that were devoted to such activity.
The judge who presided over this case was the best judge of what occurred in the courtroom. (Vo, supra, 79 Cal.App.4th at p. 447.) "The absence of a record concerning what actually occurred at the trial precludes a determination that the trial court abused its discretion. It is not possible to judicially and appropriately determine from the inadequate record provided by [appellant] that the trial court abused its discretion in its conclusion that [$415,938.75 with a 1.5 multiplier] was a reasonable award in comparison to the scope of the litigation as a whole. [Citations.]" (Id. at p. 448.)
To the extent that appellant does direct this court to evidentiary support for her argument that the trial court should have set a higher multiplier, she still fails to establish that the trial court abused its discretion. She notes that one of the attorneys who worked on her case was awarded fees in two other cases; the court in one case set the multiplier at 2.0, and the court in another case set the multiplier at 1.5, the same multiplier selected by the trial court in this case. On the record before us, we find no abuse of discretion in the selection of a 1.5 multiplier.
3. Denial of postoffer attorney fees
Appellant also argues that the trial court abused its discretion by denying her counsel attorney fees incurred following respondent's section 998 offer to compromise. We disagree.
Attorney fees are allowable as costs to a prevailing party when authorized by statute. (§§ 1021, 1032, subd. (b), 1033.5, subd. (a)(10)(B).) Government Code section 12965, subdivision (b) authorizes an award of attorney fees and costs in the trial court's discretion to the prevailing party in FEHA cases. In certain situations, however, section 998 cuts off a plaintiff's right to attorney fees after defendant has made an offer to compromise. Section 998, subdivision (c)(1), provides: "If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer." (Italics added.) "It is the very essence of section 998 that, to encourage both the making and the acceptance of reasonable settlement offers, a losing defendant whose settlement offer exceeds the judgment is treated for purposes of postoffer costs as if it were the prevailing party." (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1113-1114, original italics [trial court awarded plaintiff preoffer costs and attorney fees under a contract but not postoffer attorney fees].) Section 998 "expands the group of those who are treated as prevailing parties." (Mangano v. Verity, Inc. (2008) 167 Cal.App.4th 944, 951.)
Applying the forgoing principles to this case, we conclude that the trial court did not err in denying appellant her postoffer attorney fees. The parties do not dispute that appellant was entitled to reasonable attorney fees that were incurred before respondent's section 998 offer, because she prevailed on some of her claims at trial and was awarded damages. However, appellant failed to obtain a more favorable award than respondent offered, as appellant's recovery at trial ($266,347) was less than respondent's section 998 offer ($300,000). Pursuant to section 998, subdivision (c), respondent, and not appellant, therefore was treated as the prevailing party for purposes of postoffer attorney fees as costs (Scott Co. v. Blount, Inc., supra, 20 Cal.4th at p. 1114), and the trial court therefore did not err in declining to award such fees to appellant.
4. Award of postoffer costs to respondent
Because respondent was the prevailing party for purposes of section 998, the trial court also ordered that appellant pay respondent's costs from the time of its offer (in the amount of $33,414.25), pursuant to section 998, subdivision (c)(1). (Holman v. Altana Pharma US, Inc. (2010) 186 Cal.App.4th 262, 281 (Holman) [FEHA permits recovery of costs by defendant pursuant to § 998].) In a somewhat confusing argument, appellant argues that section 998 "should not be used in FEHA cases to create a conflict between a civil rights attorney and his client." (Boldface and some capitalization omitted.)
Although respondent was the prevailing party for purpose of postoffer costs, the trial court's award of costs did not include respondent's postoffer attorney fees. Section 998 does not grant greater rights to attorney fees than those provided by the underlying attorney fees statute, and under the FEHA, a prevailing defendant is entitled to attorney fees "only if the action is deemed unreasonable, frivolous, or meritless." (Mangano v. Verity, Inc., supra, 167 Cal.App.4th at p. 951.) The trial court apparently concluded that appellant's action was not without merit, and it therefore declined to award respondent attorney fees, a ruling that respondent does not challenge on appeal.
Respondent's section 998 offer to compromise stated that respondent would pay appellant $300,000 "plus reasonable attorney's fees, costs and expenses incurred to date as permitted by statute, in an amount to be determined by the Court according to proof . . . ." The trial court found, and we agree, that respondent's offer was not ambiguous, because it was " 'sufficiently specific to permit [appellant] meaningfully to evaluate it and ma[k]e a reasoned decision whether to accept it, or reject it and bear the risk [s]he may have to shoulder h[er] opponent's litigation costs and expenses.' " (Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1561 (Seever) [offer to pay $200,001 plus attorney fees " 'in the amount determined by the Court according to proof' " did not render offer uncertain for purposes of § 998].)
Appellant's counsel argued at the hearing on attorney fees that any offer that includes attorney fees creates a "standard conflict" between a plaintiff and an attorney hired on a contingency basis, because the attorney may encourage the plaintiff to accept the offer, even if it is less than what the plaintiff is entitled to, so that the attorney may recover his or her fees. That clearly did not happen here, because appellant did not accept respondent's offer, notwithstanding the fact that it included an offer of reasonable attorney fees. Nonetheless, trial counsel urged the court to apply an exception to the award of postoffer costs to defendants in FEHA cases based on section 998, because otherwise attorneys would be discouraged from taking FEHA cases on a contingency basis. The trial court declined to apply such an exception, which has no basis in the statute or in case law.
On appeal, appellant requests "a clear statement from the Court as to whether or not her counsel should have disclosed a conflict of interest when she was presented with the CCP §998 offer." However, she offers no legal authority that would compel such a finding. Instead, she asks a series of rhetorical questions, such as "Does the law create such a conflict between a civil rights litigant and her attorney?" and "Does the Court seriously believe that a civil rights litigant has the ability to evaluate her own case, given the enormous complexity of civil rights litigation?" Section 998, subdivision (c)(1), provides that where, as here, a plaintiff does not accept an offer to compromise and thereafter fails to obtain a more favorable judgment or award, the plaintiff "shall pay the defendant's costs from the time of the offer." (Italics added.) The policy behind such a mandatory award of costs "is to encourage settlement by providing a strong financial disincentive to a party—whether it be a plaintiff or a defendant—who fails to achieve a better result than that party could have achieved by accepting his or her opponent's settlement offer." (Bank of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 804.) In the absence of any legal authority for creating an exception to this policy in FEHA cases, we affirm the trial court's award of costs to respondent.
We likewise decline appellant's invitation to remand the case to the trial court "to determine precisely who was responsible for declining the CCP §998 offer and deciding if the appellant was affected by [her] attorney's admitted conflict of interest." Appellant's counsel did not "admit" that there was a conflict; rather, he argued that hypothetically there may be conflicts in all cases where attorneys take on FEHA cases on a contingency basis.
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5. Award of expert witness fees
Finally, we reject appellant's argument that the trial court abused its discretion in awarding respondent $50,000 in expert witness fees. Section 998, subdivision (c)(1) provides that, in addition to the mandatory award of defendant's costs from the time of an offer to compromise, the trial court "in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services of expert witnesses . . . ." (Holman, supra, 186 Cal.App.4th at p. 282 [trial courts authorized under § 998 to award expert witness fees in FEHA cases].) "[S]eldom would a court properly deny a successful defendant its entire section 998 cost award, even in a FEHA case." (Seever, supra, 141 Cal.App.4th at p. 1562.)
At least two appellate courts have recognized that it may be appropriate to " 'scale' " awards of expert witness fees in FEHA cases. In Seever, supra, 141 Cal.App.4th 1550, the trial court awarded expert witness fees in a FEHA case pursuant to section 998. (Seever at p. 1560.) On appeal, the court concluded that "[i]f the goal of Code of Civil Procedure section 998 is to encourage fair and reasonable settlements—and not settlements at any cost—trial courts in exercising their discretion must ensure the incentives to settle are balanced between the two parties. Otherwise less affluent parties will be pressured into accepting unreasonable offers just to avoid the risk of a financial penalty they can't afford. Thus, when two competing parties possess vastly disparate economic resources, this may require the trial courts to 'scale' the financial incentives (in this instance the section 998 cost awards) to the parties' respective resources." (Id. at pp. 1561-1562.) Because the trial court had not inquired into plaintiff's financial situation, the appellate court could not evaluate whether the award of expert witness fees represented an "unduly powerful settlement incentive to a litigant of [plaintiff's] means." (Id. at p. 1562.) It therefore remanded to the trial court for a hearing on the issue. (Ibid.) In Holman, supra, 186 Cal.App.4th 262, our colleagues in Division Five agreed with the reasoning in Seever, and on that basis remanded to the trial court for a hearing to determine the amount of expert witness fees in light of plaintiff's economic resources. (Holman at p. 284.)
Here, respondent requested $111,146.50 in expert witness fees, to pay for three experts hired by respondent. Citing Seever, supra, 141 Cal.App.4th 1550, appellant claimed in her motion to tax costs, among other things, that she had "almost no resources" and therefore should not be required to pay for respondent's expert fees. She submitted a declaration stating that she had had no income since trial, and that she supported herself on disability payments that amounted to about $1,700 per month, after deductions for health care, insurance, and personal loans. At the hearing on costs, appellant's counsel argued that one of respondent's experts was not allowed to testify, and that part of respondent's request therefore was not reasonable. The trial court stated that it took into consideration the fact that one of the experts did not testify when the court decided to "whack[] their [expert witness] fees in half essentially, not quite half but close to." Respondent's counsel thereafter argued that if the trial court scaled the expert witness fees under Holman, supra, 186 Cal.App.4th 262, it was unnecessary to cut the fees by as much as half. Citing Seever and Holman, the trial court's order stated that respondent was entitled to recover expert witness fees as costs, "but given Plaintiff's financial situation, Defendant's expert witness fees request [of] $111,146.50 is scaled down to $50,000."
Appellant first argues that the trial court should not have awarded the approximately $36,000 that respondent requested for the expert witness who did not testify at trial, ignoring the fact that the trial court specifically stated that it was not awarding fees for that expert, and that the trial court awarded respondent $61,146.50 less than what was requested. Appellant also argues that the trial court did not adequately explain its exercise of discretion in awarding expert witness fees. To the contrary, it is clear that the trial court took appellant's financial situation and other factors into consideration when setting the award of expert witness fees, and we cannot conclude on the record before us that the award was an abuse of the trial court's discretion.
III.
DISPOSITION
The judgment that followed the order denying the motion for injunctive relief is affirmed in A129427. The trial court's order regarding attorney fees and costs is affirmed in A130063. Respondent shall recover its costs on appeal.
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Sepulveda, J.
We concur:
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Ruvolo, P.J.
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Reardon, J.