Judge: Anne Richardson, Case: 21STCV40792, Date: 2024-03-05 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 21STCV40792    Hearing Date: March 5, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Plaintiff Rocco Distefano sues Defendants Equinox Holdings, Inc., Melvin Myles, and Does 1 through 22 pursuant to February 7, 2022 Complaint alleging claims of (1) Retaliation – (FEHA) (Gov. Code, § 12940(h)), (2) Wrongful Termination – Violation of Public Policy, (3) Breach of Implied Contract, (4) Breach of Implied Covenant of Good Faith and Fair Dealing, (5) Discrimination (FEHA) – Sexual Harassment, (6) Discrimination (FEHA) – Failure to Fairly Compensate/Promote, (7) Harassment (FEHA) – Sexual Harassment/Sexual Orientation/Preference-Hostile Work Environment (Gov. Code, § 12940(j), et. seq.), (8) Failure to Prevent Harassment/Retaliation (FEHA) (Gov. Code, § 12940(k) et seq.), and (9) Retaliation – Whistleblower Protection (Lab. Code, § 1102.5) (Gov. Code, § 12940(h), et seq.).

On January 31, 2024, Defendant Equinox filed a motion to bifurcate the trial as to punitive damages.

On February 20, 2024, Plaintiff Distefano opposed Defendant Equinox’s motion.

On February 27, 2024, Defendant Equinox replied to Plaintiff Distefano’s opposition.

Defendant Equinox’s motion is now before the Court.

Request for Judicial Notice

Per Defendant Equinox’s request, the Court takes judicial notice of various filings made with the Superior Court. (Mot., RJN, pp. 1-3; Evid. Code, §§ 452, subd., (d), 453, subds. (a)-(b).)

Motion to Bifurcate Trial

Preliminary Note – Scope of Requested Bifurcated Trial

Defendant Equinox seeks a court order:

(1) “Bifurcating all issues pertaining to Plaintiff Rocco Distefano’s (‘Plaintiff’) request for and/or alleged entitlement to punitive damages from all other issues to be tried, pursuant to Civil Code §§ 3294 and 3295; and”

(2) “Precluding Plaintiff from introducing any reference to and evidence of Plaintiff’s claim for entitlement to punitive damages pending a finding, by clear and convincing evidence, that Defendant acted with fraud, oppression, or malice.”

(Mot., p. 2, Notice, ¶¶ 1-2.)

The Court reads the bifurcation requested as follows:

(1) Based on the request for “[b]ifurcating all issues pertaining to Plaintiff Rocco Distefano’s (‘Plaintiff’) request for and/or alleged entitlement to punitive damages from all other issues to be tried, pursuant to Civil Code §§ 3294 and 3295,” Equinox first seeks a bifurcation of the liability phase of trial from the punitive damages phase of trial; and

(2) Based on the request for “[p]recluding Plaintiff from introducing any reference to and evidence of Plaintiff’s claim for entitlement to punitive damages pending a finding, by clear and convincing evidence, that Defendant acted with fraud, oppression, or malice,” Equinox seeks a further bifurcation of the jury’s determination on whether grounds exist for punitive damages from the jury’s determination on the proper monetary amount of punitive damages.

(Mot., p. 2, Notice, ¶¶ 1-2.)

Legal Standard

“The court may, when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby, on motion of a party, after notice and hearing, make an order, no later than the close of pretrial conference in cases in which such pretrial conference is to be held, or, in other cases, no later than 30 days before the trial date, that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case, except for special defenses which may be tried first pursuant to Sections 597 and 597.5.” (Code Civ. Proc., § 598.)

“The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action … or of any separate issue or of any number of causes of action or issues ….” (Code Civ. Proc., § 1048, subd. (b).)

Bifurcation serves to (1) promote judicial economy by avoiding introduction and consideration of unnecessary evidence; and (2) prevent the determination of liability from being tainted by the consideration of irrelevant, confusing, misleading, and prejudicial evidence related to the issue of damages. (Plaza Tulare v. Tradewell Stores, Inc. (1989) 207 Cal.App.3d 522, 524; see Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 888, fn. 8 [Bifurcating trial may be proper to achieve the purpose of affording a more logical presentation of the evidence and simplifying the issues for the jury].)

Order Bifurcating Trial: GRANTED.

I. Parties’ Arguments

In its motion, Equinox argues that Civil Code section 3295, subdivision (d), supports a mandatory severance relating to a defendant’s profits or financial condition upon application by the defendant, that Code of Civil Procedure section 598 empowers courts to order bifurcation of trial, and that bifurcation here will expedite the trial, avoid jury confusion, and avoid any prejudice. (Mot., pp. 3-5.)

As to expediting trial, Equinox more specifically argues that separating the liability and compensatory damages phase of trial from the punitive damages phase of trial generally will expedite trial because of the expected differences of opinion as to what the basis for the calculations will be for punitive damages, and deferring trial on punitive until any liability and compensatory damages are established will likely save time, especially considering that all of the evidence regarding punitive damages will be entirely irrelevant in the event that no liability is found. (Mot., pp. 4-5.)

As to expediting trial, Equinox argues that separating the liability and compensatory damages phase of trial from the punitive damages phase of trial avoid jury confusion because in light of Plaintiff’s various claims for relief and prayer for punitive damages, the jury will need to understand and differentiate the legal standard for each claim, and requesting the jury to determine the appropriate measure of damages depending on the claim and the type of damages may result in jury confusion. (Mot., p. 5.)

As to undue prejudice, Equinox more specifically argues that not separating the liability and compensatory damages phase of trial from the punitive damages phase of trial would be unduly prejudicial to Equinox because, citing Adams v. Murakami (1991) 54 Cal.3d 105, 121 (Adams), there is a risk in introducing evidence of personal finances given that it places the defendant in the position of bidding against him- or herself, and, per amendments to section 3295, juries are asked to determine whether to impose punitive damages only after compensated damages and fraud, malice, or oppression are established. (Mot., p. 5.)

Equinox last adds that it met and conferred on this motion. (Mot., p. 5.)

In opposition, Plaintiff Distefano cites a number of authorities but only substantially argues a few points:

(1) “While bifurcation is a matter within the discretion of the trial court, in this case the motion should be denied because [a] the facts and evidence in the case in chief would be exactly the same as the segregating the trying of punitive damages[,] [b] [i]t is … prejudicial to [Plaintiff] due to the nature of FEHA and its purpose for punitive damages[,] [and (c)] [d]ue to the inequity of the employee/employer relationship, the jury should be aware when determining the other damages such as emotional distress, that the Defendants can be punished for its malicious acts against [Plaintiff]”;

(2) “The claims and issues for which Equinox has requested to bifurcated share common issue of law and fact and will necessarily rely upon the same evidence and witnesses as to the FEHA and contract claims as well as punitive damages”; and

(3) “[T]he testimony will be virtually the same and Equinox will not be prejudiced as the court can address Equinox’s concerns through the jury instructions.”

(Opp’n, pp. 2-6.)

In reply, Equinox presents arguments to support the positions that bifurcation is not a waste of time or judicial resources, that Equinox’s financial condition is not relevant to issues of liability, and that Equinox would not be prejudiced by non-bifurcation. (Reply, pp. 2-4.)

II.

The Court finds in favor of Equinox.

A.

First, bifurcation would promote judicial economy by avoiding introduction and consideration of unnecessary evidence. (Plaza Tulare, supra, 207 Cal.App.3d at p. 524.)

“Under the current procedure, the jury first decides whether to impose liability for compensatory damages and whether the defendant acted with fraud, oppression, or malice. (Civ. Code, § 3295, subd. (d); see also CACI 3941, 3946. Only after finding such misconduct, is the jury then asked to decide whether to impose punitive damages and, if so, in what amount.” (Adams v. Murakami (1991) 54 Cal.3d 105, 121 (Adams).)

It thus follows that here, a determination on the amount of punitive damages would necessarily follow a determination on liability. (Ibid.) And, as argued by Equinox, here, all the evidence regarding the specific request for punitive damages will be entirely irrelevant in the event that no liability is found. (Mot., p. 5.)

Second, the Court determines that bifurcation will prevent the determination of liability from being tainted by the consideration of irrelevant, confusing, misleading, and prejudicial evidence related to the issue of damages. (Plaza Tulare, supra, 207 Cal.App.3d at p. 524.)

Significantly, the language of the statute at issue here is mandatory, not discretionary:

“The court shall, on application of any defendant, preclude the admission of evidence of that defendant’s profits or financial condition until after the trier of fact returns a verdict for the plaintiff awarding actual damages and finds that the defendant is guilty of malice, oppression, or fraud in accordance with section 3294.” (Civil Code, section 3295 subd. (d).)

Based on the foregoing discussion, Defendant Equinox’s motion is GRANTED. To be clear, Plaintiff will be able to argue and put on evidence that the defendants acted with malice, fraud or oppression in phase 1. (CACI VF-3900-3904 [see use notes regarding bifurcation].) But plaintiff will not be able to argue or present evidence as to the amount of such damages until phase 2. 

Conclusion

Defendant Equinox Holdings, Inc.’s Motion to Bifurcate Trial of Plaintiff’s Punitive Damages is GRANTED.