Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc.

228 Cal. Rptr. 3d 120, 19 Cal. App. 5th 525
CourtCalifornia Court of Appeal, 5th District
DecidedJanuary 2, 2018
DocketE061677
StatusPublished
Cited by24 cases

This text of 228 Cal. Rptr. 3d 120 (Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 228 Cal. Rptr. 3d 120, 19 Cal. App. 5th 525 (Cal. Ct. App. 2018).

Opinion

SLOUGH, J.

*529Plaintiff and appellant, J. Brent Arave, brought several claims under the California Fair Employment and Housing Act (FEHA) ( Gov. Code, § 12900 et seq. ) against his former employers, Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), Bank of America (BoA), his supervisor Joseph Holsinger, and a human resources supervisor, Katherine Anderson (collectively, defendants). He sought to recover damages caused by discrimination, harassment, and retaliation based on his membership in the Church of Jesus Christ of Latter-day Saints. He also sought damages for nonpayment of wages ( Lab. Code, § 201 ) and whistleblower retaliation ( Lab. Code, § 1102.5 ).

After a five-week trial, the jury returned a verdict in favor of defendants on all counts that had survived summary judgment and dismissal. The trial court *530denied Arave's posttrial motions and awarded defendants, as prevailing parties, $54,545.18 in costs, $29,097.50 in expert witness fees, and $97,500 in attorney fees incurred defending against Arave's wage claim.

Arave appeals the verdict and the award of fees and costs. He maintains:

(1) The trial court made numerous evidentiary errors, which prejudiced Arave;
(2) Defense counsel committed prejudicial misconduct;
(3) The trial court's bias deprived him of a fair trial;
(4) The trial court committed prejudicial error by instructing the jury certain evidence could not constitute harassment attributable to his employers;
(5) The jury's verdict was not supported by substantial evidence because defendants conceded they subjected Arave to an adverse employment action;
(6) The trial court erred in denying Arave's motion for a new trial;
*124(7) The trial court erred by awarding defendants $97,500 in attorney fees on Arave's wage claim despite not finding the claim frivolous;
(8) The trial court erred in awarding defendants costs and expert witness fees on Arave's FEHA claims despite finding the claims nonfrivolous; and
(9) The trial court erred in granting summary judgment in favor of individual defendant Katherine Anderson on Arave's harassment claim.

Defendants cross-appeal, contending the trial court abused its discretion when it determined Arave's FEHA claims were not frivolous and denied them attorney fees on those claims.

We affirm the trial court in all respects but two. We conclude the trial court erred by awarding $83,642.68 in costs and expert witness fees though it found Arave's FEHA claims were nonfrivolous, and therefore reverse the order making the award. However, because a portion of the award may be attributable to Arave's wage claim, we will remand for the trial court to make that apportionment, as appropriate. We also conclude the trial court erred by awarding $97,500 in attorney fees on the wage claim without determining whether that claim was frivolous. We will remand for the trial court to make that determination.

*531I

FACTUAL BACKGROUND

A. Overview

The impetus of this employment discrimination case was an anonymous employee satisfaction survey conducted on behalf of BoA and Merrill Lynch in August and September 2010.1 Arave, who is a member of the Church of Jesus Christ of Latter-day Saints (Mormon Church or LDS), was then the managing director of Merrill Lynch's Desert Inland Empire Complex, which comprised five offices, approximately 95 financial advisors, and approximately 120 to 140 total employees. The survey contained negative comments about Arave's leadership, many of them focused on the accusation he showed favoritism toward members of his church (Mormons).

The survey results became available in December 2010. However, Arave did not review the results until his new regional manager, Joseph Holsinger, emailed everyone in the region about them in January 2011. Holsinger was new to the job. BoA had promoted him from director of another complex to regional managing director of the southwest market, and he began the new job on January 3, 2011. He received the survey results on January 7, 2011 and emailed all employees in his region about them on January 17, 2011. Holsinger said he wanted to ensure his employees he had read all their comments and let them know they could count on receiving meaningful responses from management.

Arave replied by email to Holsinger to say he had not seen the survey, but wanted to respond, and to express interest in being promoted to director of a larger complex in Orange County. In the ensuing days, Holsinger informed Arave he would not be considered for the promotion, told him the survey comments were one reason *125why, and met with him to discuss responding to the religious favoritism comments. Holsinger encouraged Arave to address everyone in his office and "take ownership" of the environment which led to the perceptions of favoritism expressed in the survey. Initially, Arave seemed receptive to addressing the issue, but later said he did not want to address the religious favoritism comments, and said he did not appreciate being asked to apologize for his religion. According to Arave, he regarded the comments themselves as harassing and had told both Holsinger and Katherine Anderson-a BoA human resources manager Holsinger had charged with helping Arave respond to the comments-that he viewed them as such. *532On March 17, 2011, Arave's attorneys sent BoA a letter complaining of religious discrimination and retaliation. According to the letter, the comments were acts of religious discrimination and Arave was their victim. He accused BoA of failing to investigate the discriminatory comments, denying him a promotion based on the comments, requiring him to apologize for his religion, and otherwise creating a hostile work environment. BoA began an investigation into Arave's accusations. Though a third party hired to conduct the investigation sought to interview him, Arave found the person hostile and refused to be interviewed.

On March 29, 2011, Arave resigned and later filed suit against BoA, Merrill Lynch, Holsinger, and Anderson. In addition to Arave, Holsinger, and Anderson, the primary witnesses were Gregory Franks, the divisional director of the Merrill Lynch western region and Holsinger's superior and two human resources management personnel-Wendy Wall and Mary Mack. Wall was a senior vice president in the human resources department who reported to Franks and supervised Anderson. Mack was a vice president and team manager in the department which investigated discrimination complaints (Advice and Counsel), and she consulted with Anderson and Wall about the survey comments. The facts as we recount them come from the testimony of those six witnesses and trial exhibits they discussed.2

B.-G.

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Bluebook (online)
228 Cal. Rptr. 3d 120, 19 Cal. App. 5th 525, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arave-v-merrill-lynch-pierce-fenner-smith-inc-calctapp5d-2018.