Judge Kerry Bensinger, Case Number: 22STCV22091, Date: 2024-08-09 Tentative Ruling

PLAINTIFF’S MOTION IN LIMINE NO. 1 TO EXCLUDE OLGA PALOMAR, MARLA LOPEZ, SARA CAMPUZANO, AND CINDY GONZALEZ AS WITNESSES

On July 8, 2022, Plaintiff Rachel Sungwon filed this FEHA action against Defendants Velvet Apparel, LLC (Velvet Apparel) and Henry Hirschowitz (Hirschowitz). The operative pleading is the First Amended Complaint (FAC), which alleges causes of action for:

(1) Discrimination Based On Race And National Origin (Cal. Gov’t Code § 12940(a))

(4) Unfair Business Practice In Violation Of California Business & Professions Code Section 17200 et seq.

As alleged in the FAC, Plaintiff is an immigrant from the Republic of Korea (South Korea). Plaintiff has limited English skills. In February 2022, Velvet Apparel employed Plaintiff as a pattern maker at the annual salary of $90,000.00. During Plaintiff’s 90-day probationary period, Plaintiff worked overtime without compensation despite being a non-exempt employee in order to meet Defendants’ demands. Plaintiff did not receive any complaint regarding her work. During the probationary period, a less skilled and substantially younger white female named Anja was hired part-time and for less pay. Defendants terminated Plaintiff’s employment on June 24, 2022 citing complaints regarding her poor work. Anja eventually replaced Plaintiff. Plaintiff believes she was terminated due to her race, national origin, and/or age. Further, Plaintiff alleges that Henry Hirschowitz, the sole member and manager of Velvet Apparel, is the alter ego of Velvet Apparel.

Before the court are two motions: (1) Plaintiff’s Motion to Strike Defendant Hirschowitz’s Memorandum of Costs, and (2) Plaintiff’s Motion in Limine No. 1. The matters are briefed. The court addresses each in turn.

On May 6, 2024, Plaintiff dismissed Hirschowitz from this action without prejudice. The following day, Plaintiff dismissed her third cause of action for wrongful termination.

A party challenging the amounts claimed may file a motion to tax costs, which must be served and filed 15 days after service of the cost memorandum.¿ If the cost memorandum was served by mail, the period is extended as provided in Code of Civil Procedure section 1013. If the cost memorandum was served electronically, the period is extended as provided in Code of Civil Procedure section 1010.6, subdivision (a)(4).¿ (Cal. Rules of Court., rule 3.1700(b)(1).)¿ “Unless objection is made to the entire cost memorandum, the motion ... must refer to each item objected to by the same number and appear in the same order as the corresponding cost item claimed on the memorandum of costs and must state why the item is objectionable.”¿ (Cal. Rules of Court, rule 3.1700(b)(2).)¿¿

The memorandum of cost is a verified statement by the party, attorney, or agent that the costs are correct and were necessarily incurred in the case. (Cal. Rules of Court, rule 3.1700(a)(1).)¿ “If the items appear to be proper charges, the verified memorandum is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the defendant, and the burden of showing that an item is not properly chargeable or is unreasonable is upon the [objecting party].”¿ (Oak Grove School Dist. v. City Title Ins. Co. (1963) 217 Cal.App.2d 678, 698.)¿ “[I]f the correctness of the memorandum is challenged either in whole or in part by the affidavit or other evidence of the contesting party, the burden is then on the party claiming the costs and disbursements to show that the items charged were for matters necessarily relevant and material to the issues involved in the action.”¿ (Id. at p. 699.)¿¿¿

Code of Civil Procedure section 1033.5 lists the costs that are recoverable.¿ Section 1033.5 provides: “(1) Costs are allowable if incurred, whether or not paid. (2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation. (3) Allowable costs shall be reasonable in amount. (4) Items not mentioned in this section ... may be allowed ... in the court’s discretion.”¿ (Code Civ. Proc., §¿1033.5, subd. (c).)¿¿¿

However, an award of costs in a FEHA action is governed by a different statute. A prevailing defendant in a FEHA action may be awarded fees and costs only when the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so. (Gov. Code, § 12965, subd. (c)(6).) “By making a cost award discretionary rather than mandatory, Government Code section 12965[(c)(6)] expressly excepts FEHA actions from Code of Civil Procedure section 1032(b)’s mandate for a cost award to the prevailing party.” (Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 105.) In determining whether an action is frivolous, unreasonable, or groundless, the court must not “engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. . . . Even when the law or the facts appear questionable or unfavorable at the outset, a party may have an entirely reasonable ground for bringing suit.” (Christiansburg Garment Co. v. Equal Employment Opportunity Commission (1978) 434 U.S. 412, 421-422.)

Hirschowitz seeks costs in the sum of $6,202.13. (See Memorandum of Costs, 5/14/24.) Plaintiff argues the costs should be stricken on two principal grounds: (1) Hirschowitz is not a prevailing party because Plaintiff voluntarily dismissed him from this action, as well as the third cause of action for wrongful termination; and (2) Defendants never moved the court to determine via motion for summary judgment or judgment on the pleadings, whether Plaintiff’s action was “objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.”

Hirschowtiz argues that Plaintiff does not account for her other non-FEHA causes of action. As the argument goes, because Plaintiff’s non-FEHA claims are separate and stand-alone claims, he is entitled to costs as the prevailing defendant following dismissal. In other words, Hirschowitz contends Plaintiff’s FEHA claims are not inextricably intertwined with Plaintiff’s other claims.

In reply, Plaintiff advances the new argument that the court lacks jurisdiction to determine whether Plaintiff’s FEHA claims against Hirschowitz were frivolous.

The parties provide “snapshots” and incomplete statements of the relevant law. The court summarizes the issues as follows: (1) May Hirschowitz recover costs as the prevailing defendant in a FEHA action after being dismissed voluntarily by Plaintiff? (2) Does the court lack jurisdiction to determine whether Plaintiff’s FEHA claims are frivolous? (3) Are Plaintiff’s FEHA causes of action inextricably intertwined with her non-FEHA claims?

As discussed herein, the answers are “Yes” to Issue 1 and “No” to Issue 2. Further, because the court finds that the parties have not sufficiently briefed Issue 3, the court will discuss with the parties whether a continuance of this motion is needed.

Plaintiff argues that Hirschowitz is not a prevailing defendant because Plaintiff voluntarily dismissed Hirschowitz from this action.[1]

Plaintiff is incorrect. Under the general costs statute, a defendant as “prevailing party” is not defined by whether the plaintiff’s claims have been adjudicated in defendant’s favor or if the plaintiff voluntarily dismissed the defendant. Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding. (Code Civ. Proc., § 1032, subd. (b).) A voluntary dismissal of an action without prejudice is a sufficient precipitating event triggering the trial court’s discretion to assess an award of costs. (See, e.g., Mon Chong Loong Trading Corp. v. Superior Court (2013) 218 Cal.App.4th 87, 90 [“a voluntary dismissal constitutes the conclusion of the action and is therefore an appropriate precipitating event triggering the trial court's discretion as to the assessment of expert witness fees under [the cost-shifting provisions of Code of Civil Procedure] section 998.”].)

Here, as Plaintiff points out, a prevailing defendant in a FEHA action may obtain an award of discretionary costs upon a finding that the FEHA claim was frivolous or lacking in objective merit. (See Christiansburg Garment Co. v. E.E.O.C. (1978) 434 U.S. 412, 422 (Christiansburg) [holding in an Equal Employment Opportunity Commission (“EEOC”) action, trial court’s discretion to award attorney fees does not extend to a prevailing defendant unless trial court finds that the plaintiff’s EEOC “claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so.”]; see also Williams v. Chino Valley Independent Fire District (2015) 61 Cal.4th 97, 99-100 [holding that Christiansburg standard applied to an award of costs in a FEHA action]; Neeble-Diamond v. Hotel California By the Sea, LLC (2024) 99 Cal.App.5th 551, 557 (Neeble-Diamond) [“when the defense prevails in a FEHA action, it has no automatic right to recover costs under section 1032; instead, it must move the court to make a discretionary award of such costs, based in part on a specific finding that the action was frivolous.”]; see also.)

Further, by filing this motion to strike the costs memorandum, Plaintiff has placed in issue the “minimal merit” of her FEHA action. (Cf. Neeble-Diamond, 99 Cal.App.5th at p. 551 [holding that a losing plaintiff in a FEHA action is not required to respond to a Memorandum of Costs because discretionary costs in the FEHA context is governed by Government Code section 12965, subdivision (c)(6), not the general procedure for recovering the costs allowed under Code of Civil Procedure section 1032].)

In sum, following Plaintiff’s voluntary dismissal, Hirschowitz is a prevailing defendant. Hirschowitz may therefore seek discretionary costs if he shows Plaintiff’s action was frivolous or lacking in objective merit as to Hirschowitz. Further, because Plaintiff moved to strike Hirschowtiz’s memorandum of costs, Plaintiff has placed at issue the merit of her claims against Hirschowitz.

Plaintiff next argues that dismissal of Hirschowitz from this action deprived the court of jurisdiction to determine whether her FEHA action was frivolous. In support, Plaintiff cites Associated Convalescent Enterprises v. Carl Marks & Co. (1973) 33 Cal.App.3d 116, 120 (Associated Convalescent) for the proposition that following entry of voluntary dismissal, the trial court is without jurisdiction to act further in the action. The point is not well taken. Plaintiff submits a selective citation of Associated Convalescent which omits language directly unfavorable to her position. In full, Associated Convalescent states: “Following entry of such dismissal, the trial court is without jurisdiction to act further in the action [citation] except for the limited purpose of awarding costs and statutory attorney's fees.” (Id., emphasis added.) Determining whether Plaintiff’s FEHA action was frivolous is directly relevant to the determination of awarding discretionary costs. The court has jurisdiction to determine Hirschowitz’s right, if any, to costs.

Issue 3: Whether Plaintiff’s FEHA and Non-FEHA Claims are Inextricably Intertwined

“[T]he general rule pursuant to section 1032[b)], is that ordinary litigation costs are recoverable by the prevailing party. Government Code section 12965, subdivision (b) creates an exception to that rule for FEHA cases, allowing a prevailing defendant to recover costs only upon a showing the lawsuit was objectively groundless. By a parity of reasoning to the cases regarding allocation of attorney fees [e.g., Reynolds], that provision establishing an exception to the general rule for an award of costs should apply to any other cause of action that is intertwined and inseparable with the FEHA claims.” (Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1062, fn. 20, emphasis added.)

This issue has not been sufficiently addressed by the parties. The court notes that Hirschowtiz points to evidence which allegedly supports his view that Plaintiff’s claims lacked merit. However, the court is inclined to continue the matter to allow both parties to brief the matter and submit supporting evidence.

The court raises one issue not discussed in the papers. Plaintiff is proceeding with her claims against Velvet Apparel. As alleged, Velvet Apparel is the alter ego of Hirschowitz. (FAC, ¶¶ 5-8.) Given this background, the resolution of Plaintiff’s claims against Velvet Apparel may well impact any ruling on an award of discretionary costs to Hirschowitz. The court will hear from the parties.

This action was filed on July 8, 2022. Plaintiff thereafter propounded Form Interrogatories on Velvet Apparel on August 17, 2022. Velvet Apparel served responses on September 20, 2022.

On May 6, 2024, Plaintiff’s counsel provided Defendants with a proposed joint witness list. The follow day, Defense Counsel provided Defendants’ witness list, which includes Olga Palomar, Marla Lopez, Sara Campuzano, and Cindy Gonzalez (“Proposed Witnesses”), among others.

On May 10, 2024, Plaintiff’s counsel met and conferred with defense counsel to exclude the Proposed Witnesses, claiming Defendants never disclosed or identified them in responses to Plaintiff’s Form Interrogatories. Defense counsel did not respond.

Plaintiff now moves in limine to exclude Proposed Witnesses from testifying at trial.

It is undisputed that Velvet Apparel did not specifically identify Proposed Witnesses Olga Palomar, Marla Lopez, Sara Campuzano, and Cindy Gonzalez in their responses to Plaintiff’s Form Interrogatories. (Opp., Ex. A, Responses to Form Interrogatories 12.1, 15.1, and 17.1.) Accordingly, the issue to be decided is whether Velvet Apparel’s Proposed Witnesses may be excluded from testifying at trial when the Proposed Witnesses were not specifically identified in discovery responses.

In essence, Plaintiff seeks an evidence sanction. That remedy is not warranted. “[E]xclusion of a party's witness for that party's failure to identify the witness in discovery is appropriate only if the omission was willful or a violation of a court order compelling a response. (Mitchell v. Superior Ct. (2015) 243 Cal.App.4th 269, 272, citing Code Civ. Proc., §§ 2023.030, 2030.290, subd. (c), 2030.300, subd. (e).)

Here, the court finds the omission was not willful. As Velvet Apparel explains, Plaintiff propounded the Form Interrogatories on August 17, 2022—a mere 40 days after Plaintiff commenced this action. (Horwitz Decl., ¶ 4.) The “infancy” of the action prompted the following responses by Velvet Apparel:

Response to Form Interrogatory 12.1: “This matter is in its infancy. Responding Party has not yet had an opportunity to complete its investigation and discovery in this matter, and reserves the right to supplement and/or amend these responses in the future.” (Horwitz Decl., ¶ 7.)

Response to Form Interrogatory 15.1: “Defendant further objects on the ground that this interrogatory is premature as this lawsuit has just commenced and discovery is ongoing.” Without waiving those objections, Velvet responded, in part: “(b) Requesting and Responding Parties, requesting party’s parents, siblings, friends and family, all employees at Velvet, whom may be contacted via defense counsel.”; and (several times) “Requesting and Responding Parties, all employees at Velvet, whom may be contacted via defense counsel.” (Horwitz Decl., ¶ 8.)

Response to Form Interrogatory 17.1: “Defendant objects to this interrogatory on the ground that it is premature as this lawsuit has just commenced, and discovery is ongoing. Defendant's investigation and discovery in preparation for trial has not been completed.”; “Henry Hirschowitz, Claudia Gonzalez, Debbie Kirkland.”; and “Responding party, Debbie Kirkland, Janine Glick”. (Horwitz Decl., ¶ 9.)

Further, Velvet Apparel points out, and Plaintiff does not dispute, that (1) no meet and confer regarding Velvet Apparel’s discovery responses was made, (2) no motion to compel was filed, (3) no informal discovery conference was requested, and (4) no request for supplemental responses was served. (Horwitz Decl., ¶¶ 10-13, emphasis added.)

Based on the foregoing, the court cannot find that Velvet Apparel’s omissions were willful. Further, because Plaintiff did not seek an order compelling Velvet Apparel to provide a supplemental or further response to the Form Interrogatories, there is no evidence that Velvet Apparel violated a court order which would justify exclusion of the Proposed Witnesses.

Nevertheless, the court (as was previously mentioned by the court) is inclined to permit Plaintiff to depose the Proposed Witnesses. The court will discuss this issue with the parties.

Plaintiff’s Motion in Limine No. 1 is DENIED. The court will discuss with the parties a trial continuance to allow Plaintiff to depose the Proposed Witnesses.

The court is inclined to continue the Motion to Strike Costs. The court will hear from the parties.

The motion is DENIED. The court is inclined to allow Plaintiff to depose the Proposed Witnesses. The court will hear from the parties.

Kerry Bensinger

Judge of the Superior Court

[1] Plaintiff also cites the dismissal of her wrongful termination claim in support of her position. However, it is not clear how dismissal of that claim impacts the analysis.