Wednesday, January 22, 2014

It's Harmless Error Week

Taylor v. Nabors Drilling USA, LP, No. B241916 (D2d6 Jan. 13, 2013)

Amongst a number of other substantive issues about employment law, the court holds that: (1) absent prejudicial error, an erroneous special verdict form does not merit reversal; and (2) that an award of attorneys’ fees to plaintiff’s lawyer was reasonable.

This is a pretty ugly hostile work environment case brought by a heterosexual oil rig worker who was harassed by several coworkers, who taunted him for being gay, although they purportedly knew he wasn’t. The worker won a $160,000 verdict against his employer, as well as an attorney fee award of over $680,000. The employer appealed. The employer made several substantive arguments about hostile work environment law and the calculation of damages, all of which were rejected other than a small reduction in the damages award. The employer also argued that the special verdict for was erroneous because it omitted two elements of the cause of action and that the award of fees to the workers lawyer were excessive. We’ll address those here.

First, in the heat of trial, the parties screwed up the verdict form. They had originally agreed to a special verdict form correctly walked the jury through all of elements of a hostile work environment claim, on which the jury was properly instructed under CACI 2521A. But in preparing the final form that was actually submitted, the employee’s attorney erroneously drafted after question 4’s condition “if the answer to question 4 is yes,” that the consequence was that the jury should “skip ahead to question 10.” Instead of what the form should have said: “then answer question 5.” The court submitted the erroneous form to the jury, which diligently followed the erroneous instructions and skipped two questions that asked about the final two elements of the hostile work environment claim. The employer’s counsel had read the submitted form before it was submitted, but missed the mistake. Nor did he raise the issue when the jury was polled on the verdict. Instead, the issue was first brought to the court’s attention in JNOV motion,
* in which the employer argued that the jury’s verdict could not sustain the judgment due to the lack of findings on two necessary elements of the claim.

The court of appeal first finds that the employer forfeited the error by failing to raise it before the jury was discharged. Because the error was apparent at the time of the verdict, if it was brought to the court’s attention, the error could have been corrected and the jury sent back to fix the form before it was discharged. By failing to do so, according to the court of appeal, the employer forfeited any error. In reaching this result, the court distinguishes an earlier case where the plaintiff unilaterally and deliberately submitted a verdict form that omitted two elements. Here, in contrast, the employer expressly stated its approval to the form and did not contest that the omission was due only to the worker’s typo.

Further, even if the error had not been forfeited, the omission of the two elements was non-prejudicial, and thus did not merit reversal. In the second time in the span of a week, the court here disagrees with seemingly settled precedent holding that a procedural error merits per se reversal, because Article VI, § 13 of the state constitution and Code of Civil Procedure § 475 require prejudice to merit reversal on procedural grounds. Because the earlier cases establishing a per se rule had not considered these provisions, it was a matter of first impression whether they require a harmless error analysis for a special verdict form’s omission of necessary elements. Undertaking that analysis, the court finds that any error was indeed harmless. The two elements (whether the plaintiff found the defendant’s conduct offensive and causation) were not hotly disputed and there was ample evidence that the jury would readily have found both in favor of the employee.

Second, the court affirms an award of an attorneys’ fee that is fourfold the damages awarded to the employee. It notes that the trial court was not required to make special findings on its fee calculation and that in applying the applicable abuse of discretion standard of review, any reasonable inferences in support of the award would be drawn. Here, the trial court could reasonably have come to a loadstar calculation of slightly less than what was demanded by plaintiff. It was not required to apportion the award between the worker’s successful claims and related wrongful termination claims on which the jury did not find liability. And the multiplier the trial court implicitly applied (either 1.4 or 1.5, depending on how the loadstar worked out) was permissible to account for the contingent nature of the employee’s lawyer’s work and the attendant risk that he would go uncompensated.

Affirmed in relevant part. 

*An aside about post-trial remedies: The court here correctly notes that a prior case held that “a fatally defective special verdict may be remedied by granting a motion for JNOV[.]” (citing Saxena v. Goffney, 159 Cal. App. 4th 316, 329 (2008)). I can’t and don
’t fault the court for relying on a plain statement of law in an earlier case on a seemingly minor point of procedure that isnt outcome-determinative. But I also can’t resist the urge to note that—par for the course with the muddle our courts have made of post-trial remediesSaxena was clearly incorrect on this point.

A JNOV is authorized when “a motion for a directed verdict for the aggrieved party should have been granted[.]” Cal. Code Civ. Proc. § 629.  And a motion for directed verdict, which acts as a demurrer to the evidence, lies only when the evidence on a particular issue is insufficient to sustain a jury verdict. See Newing v. Cheatham, 15 Cal. 3d 351, 358–59 (1975). Because a directed verdict goes to the evidence, it invariably occurs before the case is given to the jury. It thus does not make any sense that a directed verdict would lie to address errors in the drafting of a verdict form. It follows that a JNOV is also inappropriate to address an error on the verdict form because it too is an attack on the sufficiency of the evidence.

Fear not! The Code provides. Indeed, Code of Civil Procedure § 663, ¶ 2 specifically permits a court to vacate a “judgment or decree not consistent with or not supported by the special verdict” and enter a new judgment consistent with it. Presumably, had the employer not forfeited the error, it could have obtained relief under § 663 because the judgment could not be sustained by the verdict's findings. Further, because submitting an erroneous special verdict to the jury is legal error, it is also grounds for a new trial under Code of Civil Procedure § 657(7). See Neal v. Montgomery Elevator Co., 7 Cal. App. 4th 1194, 1198 (1992). (That, notwithstanding Saxena’s claim
that a new trial motion would not reach an erroneous special verdict because “erroneous special verdict form” is not listed as a grounds under § 657.) Indeed, the trial court has the discretion to order a new trial based on a legal error in instructing the jury, even if it was invited. Id.; McCarty v. Cal. Dept. of Trans., 164 Cal. App. 4th 955, 984 (2008). 

The difference gives some flexibility over the remedy that is needed to avoid unjust results. Suppose the court had drafted its own verdict form, and used it over both parties
objections. The employee wins, the employer moves for JNOV, and the court realizes its mistake. Since JNOV requires the full-blown entry of judgment the other way, the plaintiff would just lose, even if the evidence would have sustained the verdict had the jury been correctly queried. The new trial option lets the court ensure that justice is done. (If the evidence supports the plaintiff, it seems anomalous that he should lose his whole case just because the court made a mistake favorable to his case.) And if the plaintiff deserved to lose—if, for instance, the court finds the error invited and declines to excuse it, like happened here—the remedy should lie under § 663, which lets the court fix the judgment. But a JNOV should only lie if there were no evidence on which a reasonable jury could find for the plaintiff on the missing elements. Consequently, the statement in Saxena the court relied upon herethat “[t]he proper way to remedy [a] defective verdict was to grant [defendants] motion for JNOV on plaintiffs [claim where an element was missing from the special verdict form], not to order a new trial,” can’t be right.

In the end, it made no difference. But as I’ve said before, post-trial remedies in California are a mess. There are too many, they overlap, they conflict, and litigants and the courts keep making mistakes. The fragmented and inconsistent nature of the existing case law makes it almost impossible to run the various rules to ground. Frankly, you often can’t really rely on an opinion for what appears to be a plain vanilla statement of law, unless you take it all the way back to make sure it is consistent with first principles. That all leads to randomness, and on occasion, some pretty unjust results. Either the supreme court needs to get involved to write some kind of a magum opus on post-trial motions that clears away all of the brush, or the legislature needs to step in to fix the situation. Given the high court’s expressed hesitancy to do the former, someone should probably start drafting the bill.

No comments:

Post a Comment