THE LETTER OF THE LAW: APRIL 2014

IN THIS ISSUE:

EMPLOYMENT LAW: Employer May Recover Attorney Fees Under FEHA Where Plaintiff's Evidence of Discrimination is Solely Speculation

FAMILY LAW: When Co-Parenting Seems Impossible

CONSTRUCTION LAW: Offers of Judgment in Construction Defect Cases in Nevada

Employer May Recover Attorney Fees Under FEHA Where Plaintiff's Evidence of Discrimination is Solely Speculation

By: La ura C. Hess

In the recent case of Robert v. Stanford Univ. , No. H037514, 2014 WL 793112 (Cal. Ct. App. February 25, 2014), plaintiff brought an action against his former employer for discrimination under the California Fair Employment and Housing Act (FEHA.) He alleged that he was terminated because of his ancestry, American Indian. At trial, defendant presented evidence that plaintiff was terminated because of his harassment of a female coworker, and that plaintiff had received several warnings before he was terminated. The only evidence of discrimination that plaintiff presented at trial was his own testimony that he believed those who investigated the co-worker's harassment complaint and terminated him, had discriminated against him.

At the close of evidence, the employer moved for nonsuit on the discrimination claim. The trial court granted the motion for nonsuit. Likely to plaintiff's surprise, the trial court then granted defendant's motion to recover its attorney's fees under FEHA. The court did so on the basis that it found plaintiff's discrimination claim was without merit, frivolous, and vexatious. The court found that plaintiff's case was "a legal theory in search of facts," and no facts were presented.

The plaintiff appealed the attorney fee award. The California Court of Appeal affirmed. The record indicated that the trial court had considered the plaintiff's financial condition. The appellate court also found there was no abuse of discretion. Other than his own opinion, plaintiff never had or even claimed to have any evidence that his race played a role in his termination. This reflected the meritless nature of the claim.

This is an interesting opinion for employers. One of the biggest "hammers" in plaintiff arsenals in FEHA cases such as this is the one-sided nature of the right to recover attorney fees. The general rule in FEHA cases (i.e. for discrimination) is that the plaintiff may recover attorney fees from the defendant if he or she prevails, but the employer may not recover attorney fees from the employee if the employer prevails. There is a limited exception to this rule if there is truly no evidence in plaintiff's favor and the plaintiff's claim is frivolous. However, courts are generally reluctant to ever award attorney fees to prevailing employers in FEHA cases. The reason for this is because the employer is in a better position to afford the cost of attorney fees than the plaintiff, and because of the potential chilling effect on employees bringing claims to enforce their rights. In recent years, though, employers are seeing an increasing number of questionable discrimination claims brought by terminated employees. If an employer finds itself on the receiving end of one of these claims, it may be able to use as settlement leverage the fact that the court could invoke the exception and award attorney fees to the employer if it finds the discrimination claim is solely based on speculation.

When Co-Parenting Seems Impossible

By: Hoang-Anh Zapien

When you cannot stand to be in the same room as your ex-spouse, having to co-parent with the other person seems difficult, if not impossible. But as unattainable as it seems, giving up on co-parenting is not an option if you want to do what is in the best interests of your children. Effective co-parenting is integral in helping children overcome divorce.

Psychologist Dr. Peggy Kruger Tietz recently shared some advice about what to do when co-parenting is not going as well as you would hope:

  1. Accept where you are. You are not in an ideal situation and it is not helpful to deny that. Do not get caught up in the "it isn't fair" game. It will only hinder your progress. Accept the fact that you will have a tougher time than some parents, and be willing to put in the work.
  2. Trust yourself. If your ex is a less than perfect parent. That is not something you can control. You cannot make up for that. You are already trying to be the best parent that you can be, so doing more will not make up for what your ex is not doing. Trust that you are doing your best, and know that every parent makes mistakes along the way.
  3. Create a support system. Make sure that you have people in your life who know your situation and generally give good advice. It can be a therapist, or you can talk to a good friend or family member. You need to strengthen yourself and have your own support if you are going to support your children.
  4. Be flexible. Dealing with your ex may not be fun. It will not be easy, but the more flexible you are, the more flexible he or she most likely will be. Being unwilling to change plans or to work things out will only make it harder on both of you. Do not cause yourself unnecessary headaches.
  5. Different houses have different rules. Your kids might "hate" you in that moment because you are more strict than your ex, but they will understand one day. Do what you think is best, and let your ex do what he or she thinks is best.

As the old saying goes, "no one ever said raising kids would be easy." Raising children with an ex-spouse makes this already difficult task even more difficult, but it is not impossible. If both parties are committed to doing what is best for the children, the emotions from the divorce will diminish in time, and the parties will be better suited to focus on co-parenting. When there is a committed effort from both parties, co-parenting may never be simple, but it can get easier.

Offers of Judgment in Construction Defect Cases in Nevada

By: Robert L. Thompson

Offers of Judgment in Nevada are governed by Nevada Revised Statute 17.115 and Nevada Rule of Civil Procedure 68. At any time, up to ten days before trial, any party may serve on one or more of the parties, a written offer to allow judgment to be taken in accordance with the terms and conditions of the offer. The opposing party has ten business days to either accept or reject the written offer. If the party rejects the offer but then receives a verdict that is less than the offer at trial, the party that made the offer may be entitled to recover their post-offer fees and costs through trial, including attorney fees. Utilizing such Offers of Judgment can be an effective way to entice the parties to settle before taking a case to trial.

On paper, an Offer of Judgment would seem ideal in a construction defect case due to the large amount of expert fees that are involved. Serving a homeowner with one might make them reconsider the risks of taking a case to trial, since they could be faced with the developer's fees and costs should they recover a smaller verdict at trial. However, there have been ambiguous interpretations of the rule largely due to the fees and costs that are associated with NRS 40.655, which governs awards of fees and costs for construction defect allegations, and NRS 18.020, which generally governs the awards of fees and costs for prevailing parties in Nevada civil lawsuits. For example, a developer could issue an Offer of Judgment to a homeowner which is greater than the verdict received at trial. Nevertheless, if the homeowner receives a judgment in their favor, although smaller than the Offer of Judgment, he or she can argue that as prevailing parties in the lawsuit, fees and costs should be awarded pursuant to NRS 40.655 and NRS 18.020. When added to the verdict the total may overcome the amount that was included in the Offer of Judgment. As such, the homeowner will claim that he or she beat the Offer of Judgment, and the defense would not be entitled to any fees and costs associated with NRS 17.115 and NRCP 68.

The Nevada Supreme Court recently weighed in on this issue in Gunderson v. D.R. Horton, 130 Nev., Advanced Opinion 9 (February 24, 2014). In Gunderson, 40 homeowners brought a complaint for construction defects against D.R. Horton. Prior to trial, D.R. Horton issued individual Offers of Judgment to all 40 homeowners based on the extent of each of their property's respective defects. 39 of the homeowners rejected those offers. The jury awarded each homeowner $66,300 in damages, which was below each of the previously made Offers of Judgment. Following the verdicts, both Plaintiffs and D.R. Horton brought motions for costs and attorney's fees, with D.R. Horton arguing they were entitled to fees under NRS 17.115 and NRCP 68. Plaintiffs claimed they were entitled to fees and costs under NRS 40.655 and NRS 18.020. The district court awarded D.R. Horton post-offer fees and costs, but refused to award attorney fees, and both sides filed appeals to the Nevada Supreme Court.

The Supreme Court ruled that NRS 40.655 does not preclude the application of the penalty provisions of NRCP 68 and NRS 17.115, which govern Offers of Judgment in civil cases. Additionally, the Court ruled that when an offeree rejects a valid Offer of Judgment but fails to obtain a more favorable verdict, NRS 17.115 and NRCP 68 preclude the offeree from collecting fees and costs after the service of the offer. The Court held that the homeowners were not entitled to any fees and costs under NRS 18.020 or NRS 40.655. Essentially, the Court ruled that Nevada's Offer of Judgment statute supersedes Chapter 40.

This ruling will benefit general contractors and subcontractors in future construction defect cases because it will bring additional force to Nevada's Offer of Judgment rule. Previously, attorneys for the homeowners would disregard reasonable Offers of Judgment because they believed they could overcome any verdict after additional fees and costs were awarded pursuant to Chapter 40. As such, general contractors and subcontractors would also have to calculate the individual homeowners' Chapter 40 fees and costs into the Offer of Judgment. Since the Nevada Supreme Court has now ruled that the Offers of Judgment will supersede any prevailing party fees and costs under NRS 18.020 and 40.655, the attorney for the homeowners will have to take extra precautions to advise their clients that Chapter 40 protections no longer apply. This ruling should be utilized by counsel during settlement negotiations as an effective tool to counter the Chapter 40 entitlement arguments that are often made by opposing counsel.

NEWS AND EVENTS:

Eddie H. Choi Joins Kring & Chung's Irvine, CA Office

Kring & Chung is pleased to announce that Eddie H. Choi has joined its Irvine, CA office as an Associate attorney. Choi specializes in the areas of contractual disputes, construction, employment law, products liability and real estate. He represents individuals and small and large businesses in all aspects of civil litigation.

Real Estate Seminar Presented by Anna Greenstin Kudla

On March 26, 2014, Anna Greenstin Kudla of our Irvine office presented a legal topics seminar at Keller Williams in Los Alamitos. The discussions were centered around fundamental issues real estate agents face in their day to day transactions. Some of the topics included transfer disclosure statements, commissions, real estate contracts, how to handle legal claims, and scope of fiduciary duties. The seminar lasted approximately two hours, with an extended period for questions and answers. Mrs. Kudla has been invited to speak a Keller Williams annually since 2006. If you are a broker, agent, or other real estate professional interested in having one of our attorneys speak at your office, please contact our Marketing Director, Michelle Bennett.

Upcoming Score Seminar – Common Legal Questions for Start-up Businesses

Matthew A. Reynolds of our Irvine, CA office will be conducting a workshop on May 27, 2014 at 6:00 PM regarding common legal questions for start-up businesses. New business owners often have questions regarding the formalities required to get their business off the ground. This seminar assists the small business owner in determining the best legal structure for their business. In addition, the seminar addresses the common types of contracts small business owners encounter and provides attendees with tips for entering contracts. Finally, the seminar will also touch on protecting the intellectual property of a small business. The workshop will take place at the Fountain Valley Library located at 17635 Los Alamos Valley, 92708. There is no cost for this seminar.

2014 California HR Conference – Anaheim Convention Center

Kyle Kring and Laura Hess will present "So You Received a Sexual Harassment Complaint, What Not to Do, a Trial Lawyer's Perspective," at the 2014 California HR Conference taking place at the Anaheim Convention Center August 25, 2014 through August 27, 2014.

The workshop will include discussions on failing to implement appropriate policies and procedures prior to the alleged incident, failing to perform mandatory sexual harassment training, conducting a timely investigation and documenting the investigation, retaliating against the victim and many other topics that will assist you when dealing with a sexual harassment complaint.

Our attorneys have represented employers in all aspects of employment law. They defend employers against claims for sexual harassment, wrongful termination, retaliation, disability and age discrimination, failure to accommodate whistleblower, gender discrimination, misclassification and unpaid wages.