On appeal the City contends the court abused its discretion in utilizing the remittitur procedure to reduce damages. Without challenging the jury's liability findings, the City argues that, once the court found that aspects of the jury's award were punitive, it had no choice but to grant a new trial on the limited issue of damages. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Evidence at Trial
a. Pearl's evidence
The City's Department of Public Works, Bureau of Sanitation hired Pearl in 2002 to work in the Wastewater Management Division and promoted him to supervisor in 2005. By all accounts, Pearl was a hard worker. Pearl supervised, among others, employees Lafayette Griffin and Byron Tate. In 2010 Pearl requested a disciplinary investigation of Tate, asserting that Tate's attendance was sporadic and his work performance subpar. Tate complained to managеment that Pearl had favored Griffin and unfairly targeted Tate. The City twice transferred Pearl to less favorable positions while it investigated Tate's complaint. Observing that other employees had not been transferred despite complaints from their subordinates and suspecting he was the victim of race discrimination (Pearl is African-American),
According to witnesses who testified at trial, in 2011 Potter used a software program to create an image of Griffin and Pearl embracing on a jet ski. The image, taken from Griffin's social media page, had originally depicted Griffin and a male companion on a jet ski. In Potter's edited version Pearl's head had been superimposed on Griffin's companion's body, and the blue water from
Gerald Watson, one of Pearl's managers at the Sanitation Bureau and Potter's good friend, obtained the digitally altered image and uploaded it to his cell phone. He showed it to other employees in the division and stated many times, "Can you believe this gay-assed shit? Look at this gay assed motherfucker."
James Tomlin, one of Pearl's fellow supervisors at the Sanitation Bureau, complained in an email to management that management's comments about Pearl and Griffin were making him uncomfortable. According to Tomlin, Watson habitually used homophobic slurs when discussing Pearl with others and said Pearl had "kept Griffin close" so the two could engage in oral sex in the office.
In April 2011 Pearl was transferred to a desk job, where he was ordered to "do nothing" and "stay in his cubicle." On April 25, 2011 Pearl recеived notice of intent to take disciplinary action; on July 18, 2011 he was placed on administrative leave; and on August 30, 2011 he was terminated. Pearl was told he was fired for falsifying Griffin's time reports by using an improper code and for intimidating a witness. Pearl insisted he filled out the time reports exactly as he had been taught and denied engaging in any intimidating or improper conduct. Pearl filed an administrative appeal challenging his termination. Following a hearing over several days in July and August 2012, the administrative law judge found Pearl had followed procedures and the City had no basis to terminate him. The administrative law judge recommended reinstatement, and the City did not seek review. Pearl was reinstated on October 4, 2012.
Pearl had initially been unaware of the edited image that was circulating or the stаtements by Watson and others as to his perceived sexual orientation. He had heard whispered comments such as "gay ass shit" and "homos" in his presence but did not realize the slurs referred to him. In the summer of 2012, however, he received a copy of Tomlin's email in his mailbox and learned about Watson's perpetuation of the rumors about him. Pearl's wife, who had learned about the rumors from someone else, asked Pearl whether he had been fired for having sex with Griffin. Pearl felt humiliated.
Gabriel Fajardo, who worked under Pearl's supervision, testified people asked him after Pearl returned to work, "[H]ow does it feel working for the fag? Are you going to stay in the office? Don't be in the office alone with the fag." Fajardo did not tell Pearl about these comments, and Pearl did not overhear them. Fajardo, who had filed his own complaint against the City for discrimination, harassment and retaliation, did not report the remarks to management, explaining "it wouldn't do any good because management started it." Over the City's objection, Fajardo also briefly testified the City retaliated against him when he attempted to exercise his rights under the Family Medical Leave Act to care for his disabled son.
Michael Bejarano worked with Pearl and in his testimony described а culture of pervasive harassment based on actual and perceived sexual orientation at times perpetrated by, and at other times silently condoned, by management. On one occasion Bejarano complained to management after Watson's son, a Wastewater Management Division employee under Bejarano's supervision, told him to get his "faggot ass" back in the office. Potter spoke to Bejarano and assured him the matter would be addressed. Watson's son was transferred. Three weeks later Watson's son returned to his position. Bejarano testified after his complaint the City retaliated against him by writing him up for work that had been properly performed. Meanwhile, the culture in the Wastewater Management Division persisted.
One morning Pearl arrived at work to find a corn cob, an anal sex toy and coupons for hot dogs on his desk. He did not know who had placed the items there. Rather than interceding to stop the behavior, Pearl testified, Pearl's supervisors, including Watson, either participated in it or ignored it. Pearl did not feel he had any choice other than to continue doing his job.
Two weeks after Pearl's return to work in October 2012, management directed his immediate supervisor, Bernie Rogers, to investigate Pearl for wrongdoing. When Rogers found no evidence of wrongdoing, management insisted he investigate again. Watson showed Rogers the image of Pearl and Griffin. Shortly thereafter, Watson replaced Rogers as Pearl's direct supervisor. Pearl amended his complaint with the DFEH to state a claim for harassment based on perceived sexual orientation. He continued to do his job.
On December 26, 2013 Pearl experienced chest pains and fainted at work. Paramedics rushed Pearl to the hospital, where he was treated for acute stress disorder and perniciously elevated blood pressure that had caused him to lose consciousness. Pearl had no prior history of hypertension. Pearl, then 52 years old, was placed on medical leave and has not worked since.
b. Expert testimony on Pearl's injuries
Dr. Darrell Burstein, Pearl's treating physician, testified that Pearl suffers from malignant hypertension, a condition caused by extremely elevated blood pressure that frequently causes irreversible organ damage. In April 2017 Pearl fainted and was diagnosed with atrial fibrillation, AFib, an
After meeting with Pearl and administering a battery of psychological tests and reviewing his medical and psychiatric records, Anthony Reading, Ph.D., a psychologist and former professor at the UCLA School of Medicine, testified Pearl suffers from major depressive disorder with severe anxious distress. Dr. Reading opined to a reasonable degree of psychiatric probability that the prolonged stress he experienced at work following his reinstatement had caused severe and chronic psychiatric illness.
c. The City's evidence and theory at trial
The City's position at trial was that no imрroper behavior by management had occurred. Potter categorically denied altering the photograph or circulating the edited image. Potter said he had searched Griffin's social media page and discovered a photograph of Griffin and another man on a jet ski. Believing the second man looked like Pearl, Potter handed the photograph to
The City presented no medical or psychiatric expert testimony at trial. The City attempted to introduce evidence that Pearl had been arrested in Illinois in 2012 on a drug charge while awaiting reinstatement (he was ultimately acquitted at trial on that charge) to show that factors other than the alleged harassment could havе affected his mental and physical health. The court excluded that evidence as marginally relevant and unduly prejudicial under Evidence Code section 352.
2. Preliminary Jury Instructions, Closing Argument and Final Jury Instructions
At the final status conference on August 2016, the parties submitted by stipulation a list of jury instructions and attached a packet of the instructions identified. Although the list included CACI No. 3924 admonishing the jury not to include in its award any damages intended to punish or make an example of the City (see Gov. Code, § 818 [a public entity is not liable for punitive or exemplary damages] ), for reasons not apparent from the record, a copy of CACI No. 3924 was omitted from the instructional packet.
In closing argument counsel for Pearl argued that "nothing short of $ 5 to $ 10 million" would compensate Pearl for his "pain, mental suffering, loss of enjoyment of life, physical impairment, inconvenience, grief, anxiety, humiliation and emotional distress." Recognizing such a figure could appear high when compared to Pearl's alleged eсonomic losses of $ 2 million, Pearl's counsel stated, "[I]f somebody [questions] in jury deliberations, 'Well, $ 2 million in out-of-pocket expenses; $ 10 million in harm?' explain to him and point out to him that it's because the [noneconomic harm] is the greatest harm in the case. Again, Mr. Pearl is not entitled to a penny more or [a] penny less in damages than what will match the harm he suffered." Pearl's counsel also told the jury that the culture at the Bureau "has been allowed to persist for a long period of time, and we're looking to change that culture through your verdict.... They are paying attention to your voice here: Is this okay, or do we need a change?" "I can't do anything. It's not within my power to force a change. The judge can't even do that. Only you have the ability to make change thrоugh your verdict." The City did not object to these comments.
The court gave final instructions to the jury after closing arguments. When finished, the court asked counsel for both parties whether the instructions had been properly read and whether any additional instructions were required. Counsel for the City stipulated the instructions were proper as read and responded "no" to the court's question concerning additional instructions. The jury was not instructed with CACI No. 3924.
3. The Jury's Special Verdict
In a lengthy special verdict the jury found Pearl was subjected to unlawful harassment in his employment based on perceived sexual orientation; Pearl's supervisors knew of the harassment, participated in, engaged in, assisted in or encouraged the harassing conduct and failed to take immediate and appropriate corrective action; and the harassment and his supervisors' failure to prevent harassment and retaliation were substantial factors in causing Pearl's harm. The jury awarded Pearl $ 450,053 in damages for past economic loss; $ 1,944,919 in future economic loss;
Following the jury's verdict and the court's entry of judgment, the City timely moved for a judgment notwithstanding the verdict (JNOV) and a new trial. As to the latter motion, the City argued, among other things, Pearl's counsel's statements to "send a message" and some of the court's evidentiary rulings had inflamed the jury and resulted in an excessive and inflated damage award. The City's new trial motion did not address the omission of CACI No. 3924.
At the hearing on both posttrial motions, the court stаted the only issue it was concerned about was excessive damages. As to that issue, it found the jury's award of past and future economic damages and future noneconomic damages amply supported by the evidence at trial. "However, two things combine to cause the court to believe that the award of $ 10 million for past noneconomic damages was an effort to punish the Defendant rather than to arrive at a reasonable amount of damages for that which occurred in the past to Plaintiff. [¶] The first thing is that numerous city employees and, most importantly, managers perjured themselves repeatedly during trial. Those witnesses were impeached, discredited and their stories were largely nothing but fabrications. They told those stories to proteсt themselves and their jobs. They had no concern for the sanctity of their oath. [¶] This perjury was apparent to me but more importantly to the jury. The court noted during trial that some of the juror's reactions to that testimony and the court feared at the time what impact it might have on its decision making."
The court continued, "There is no way of knowing for sure if the jury's reaction was intended to improperly punish the Defendant for not only the way the employees treated Plaintiff during employment but also when the witnesses for Defendant perjured themselves to cover up their improprieties. However, the amount of damages for past noneconomic damages convinces the court that punishment was on its mind and played, at least, a part. [¶] The jury returned $ 5 million in damages fоr future [noneconomic] injury. That amount is reasonable as Plaintiff will have continuing medical issues throughout his life including hearing loss, brain injury and psychological trauma. But the return of $ 10 million for past noneconomic damages is especially high and unwarranted. While Plaintiff returned to work and faced a difficult and harassing situation filled with sexual allegations, insults, gay jokes, gay sex toys on his desk and punitive transfers, that conduct lasted only approximately 15 months before he collapsed at work. The period warranting damages was therefore limited to that time period.
"Adding to this court's determination that the amount herein was punitive were comments made by Plaintiff's counsel in closing argument. While the
DISCUSSION
1. Governing Law and Standard of Review
Code оf Civil Procedure section 662.5, subdivision (a)(2), authorizes a court that has decided it would be proper to order a new trial limited to the issue of damages to issue a conditional order granting the new trial unless the party in whose favor the verdict has been rendered consents to a reduction of the award in an amount "the court in its independent judgment determines from the evidence to be fair and reasonable." A court exercising this authority acts as an independent trier of fact. ( Neal v. Farmers Ins. Exchange (1978)
The authority of the trial court in ruling on a new trial motion based on excessive damages "differs materially" from review of a damage award by an appellate court. ( Seffert v. Los Angeles Transit Lines (1961)
We review the trial court's use of its power of remittitur to reduce excessive dаmages for abuse of discretion. ( Schelbauer v. Butler Manufacturing Co. (1984)
The City acknowledges the trial court's broad discretion under Code of Civil Procedure section 662.5 to reduce excessive damаges. However, the City insists this is not an excessive damages case but one involving a "defective verdict," namely, an improper award of punitive damages. Because punitive damages are prohibited in an action against a public entity ( Gov. Code, § 818 ; see Newport v. Fact Concerts, Inc. (1981)
In Sabella v. Southern Pacific Company (1969)
Seizing on language in Sabella that remittitur is apрropriate when "the amount of damages can be ascertained from the evidence" ( Sabella, supra ,
A trial court does not engage in a speculative exercise when it determines, in deciding a new trial motion, that a jury's damage award was the product of passion or prejudice and must be reduced accordingly. Rather, it is acting as an independent factfinder and determining, based on the evidence presented at trial, the amount of damages thаt is fair and reasonable. ( Code Civ. Proc., § 662.5 ; see Sabella, supra ,
The City's reliance on Schelbauer, supra ,
Alternatively, the City urges us to consider the trial court's decision to conditionally deny a new trial on the issue of damages in the context of Pearl's counsel's improper argument asking the jury to send a message (see Garcia v. ConMed Corp. (2012)
The City's reliance on authorities involving appellate review of undifferentiated damage awards misses the mark. None of those cases involved the trial court's exercise of its remittitur power in ruling on a new trial motion: In Gillan v. City of San Marino (2007)
Similarly, Kellogg v. Asbestos Corp., Ltd. (1996)
In Nelson v. County of Los Angeles (2003)
In citing Gillan, Kellogg and Nelson , the City erroneously equates an appellate court's inability to evaluate the cоmponents of an undifferentiated damage award based solely on the record on appeal with the trial court's decisionmaking role as factfinder in ruling on a new trial motion. It makes a similar analytic error when it relies on authorities addressing the appellate court's limited power of remittitur, rather than the trial court's authority under Code of Civil Procedure section 662.5, subdivision (a)(2). (See, e.g., Bigler -Engler v. Breg, Inc. (2017)
The issue presented by the City is not how our power of remittitur as an appellate court is appropriately exercised (cf. Bullock, supra ,
The City identifies certain evidentiary rulings at trial-the admission of evidence that others had suffered harassment or retaliation and the same managers, when alerted, did nothing to address it (so-called "me too" evidence), the admission of Fajardo's testimony the City retaliated against
Finally, the City implores us to reduce "a colossal" $ 10 million award of noneconomic damages, five times the amount of Pearl's economic damages, claiming it " 'shocks the conscience' and cannot stand." Once again, we are compelled to state the proper standard of review: When an appellate court reviews a jury verdict for excessive damages, it can interfere "only on the ground the verdict is so large that, at first blush, it shocks the conscience and suggests passion, prejudice or corruption on the part of the jury." ( Seffert v. Los Angeles Transit Lines, supra , 56 Cal.2d at pp. 506-507,
One of the most difficult tasks imposed on a factfinder is to determine the amount of money the plaintiff is to be awarded as compensation for pain and suffering. ( Capelouto v. Kaiser Foundation Hospitals (1972)
The evidеnce of the medical experts, undisputed at trial, was that severe and unremitting harassment had caused Pearl to suffer a "catastrophic emotional and physical breakdown" that resulted in malignant and chronic hypertension, organ damage, partial hearing and vision loss, and disabling and chronic psychiatric illness. In conditioning the denial of a new trial on Pearl's acceptance of a reduced sum for past noneconomic damages, the court, stating its reasons in great detail (see Code Civ. Proc., § 657 [a court granting a new trial, conditionally or not, based on excessive damages must specify its reasons the evidence requires a smaller verdict] ), determined that an award of noneconomic damages (past and future) in the amount of $ 10 milliоn was fair and reasonable, observing Pearl would suffer "for the rest of his life." We cannot say that determination, amply supported by the evidence in the record, was an abuse of the trial court's broad discretion. (See Daggett v. Atchison, T. & S. F. R. Co. (1957)
DISPOSITION
The judgment is affirmed. Pearl is to recover his costs on appeal.
We concur:
ZELON, J.
SEGAL, J.
Notes
CACI No. 3924 provides, "You must not include in your award any damages to punish or make an example of [name of defendant ]. Such damages would be punitive damages, and they cannot be part of your verdict. You must award only the damages that fairly compensate [name of plaintiff ] for [his/her/its ] loss."
The jury was instructed that noneconomic damages included "[p]ast and future physical pain, mental suffering, loss of enjoyment of life, physical impairment, inconvenience, grief, anxiety, humiliation and emotional distress. [¶] No fixed standard exists for deciding the amount of these noneconomic damages. You must use your judgment to decide a reasonable amount based on the evidence and your common sense...."
In a footnote to its ruling the court recognized, "[I]t is odd that the perjury should act here in any way to benefit Defendant. The unanimous verdict as to liability is telling as to the initial impact of that testimony. It was near unanimous as to damages as well. But the court must consider its impact as it inflamed the passions of the jury."
The Supreme Court has held that the trial court's failure to provide a stipulated instruction on a necessary element of the plaintiff's FEHA claim does not result in a forfeiture despite the defendant's failure to object. (See Green v. State of California (2007)