May deficiency in special verdict on essential elements required to establish liability be satisfied by trial judge inference and the finding affirmed on appeal as harmless error?

Posted in: Appellate Review, Trial Practice by Steven Vartabedian on

In what it described as a “first impression case,” the Court of Appeal, Second District, Division Six, affirmed the trial court’s inferring necessary findings from a defective special verdict because the defect constituted “harmless error.” The very first sentence of the court’s opinion in Taylor v. Nabors Drilling USA, LP (filed 1/13/14) B241914 gives this answer. That the appellate court is applying harmless error analysis to what has widely been viewed as structural error, and that the court does so without prior express legal authority, strongly suggested that the case may be appropriate for review. However, on April 16, 2014, the California Supreme Court denied the petition for review filed by appellant Nabors.

Before synopsizing the opinion, a disclosure is in order. Appellant was represented in this matter by Dowling Aaron Incorporated, which sponsors this blog, and with whom I have been of counsel since my retirement from the Court of Appeal, Fifth Appellate District.

In Taylor, respondent went to jury trial against appellant, his former employer, on claims of wrongful termination and hostile work environment sexual harassment, failure to prevent sexual harassment, and unlawful retaliation under the California Fair Employment Housing Act (FEHA); and termination in violation of public policy. The evidence strongly supported bad behavior committed against respondent from day one by two of his supervisors. One, Joe Mason (who obnoxiously supervised respondent previously with a different employer before they both became employed by respondent in June 2010) constantly used homosexual epithets when referring to respondent, and committed other debasing stunts against him. As Mason was well aware, respondent had a girlfriend and denied he was homosexual. A second supervisor, Jaime Mendez, who testified he did not consider Respondent to be gay, would spank defendant, ask him to sit on his lap, and on one occasion, urinated on respondent. Respondent testified that he was “infuriated, disgusted and humiliated” by this conduct.

In September 2010, respondent complained to appellant employer about the harassment. After an investigation, Mason was terminated; Mendez stayed on the job, but stopped harassing respondent. On December 19, 2010, appellant terminated respondent’s employment for the following reasons: often late to work, missed a mandatory safety meeting, left shifts early without permission while falsely declaring that he had permission, and cursing at Mendez when asked to perform a work task.

The jury found for appellant on all of the claims except for the claim of hostile work environment sexual harassment. On that cause of action, respondent was awarded $10,000 economic plus $150,000 non-economic damages. FEHA-based attorney fees were awarded by the trial court in the sum of $680,520.

A JNOV motion was raised by respondent in the trial court on several grounds. One of those grounds was that the evidence was insufficient to establish respondent was harassed because of his sex or perceived sexual orientation. A second ground was that the special verdict was defective because it did not direct the jury to make necessary findings on hostile work sexual environment: whether respondent subjectively considered the work environment to be hostile or abusive (having found it be objectively so, that it was based on sex and/or perceived sexual orientation, and that the harassment was severe or pervasive), and whether the hostile environment was a substantial factor in causing harm to respondent. The motion was denied. Appellant appealed on various grounds included the two assertions stated here on the motion for JNOV. Except to strike the economic damages for insufficient evidence, the Court of Appeal affirmed.

On whether substantial evidence supported that respondent was harassed because of his sex and /or perceived sexual orientation, the trial court had found that the evidence of the supervisors’ misconduct was “specifically sexual in nature, ” thus sufficient. As the appellate court notes, FEHA makes it unlawful for an employer to harass an employee because of the employee’s sex, gender, identity, gender expression . . .or sexual orientation.” (Government Code section 12940, subd. (j)(1)). The court here was faced with a split of authority on the issue, choosing to follow its fellow Second District opinion (Division Eight) of Singleton v. United States Gypsum Company (2006) 140 Cal.App.4th 1547 over the First District case of Kelley v. The Conco Companies (2011) 196 Cal.App.4th 191. Singleton says that sexual harassment occurs when sex is used as a weapon to create a hostile work environment. Kelley
later criticized Singleton and found where no evidence is presented that the supervisor’s comments were an expression of sexual desire or intent or that they resulted from plaintiff’s actual or perceived sexual orientation, there can be no FEHA harassment because of plaintiff’s sex, gender, identity, gender, identity, gender expression or sexual orientation.

On the matter of the special verdict defect, the appellate court notes, “a special verdict is ‘fatally defective’ if it does not allow the jury to resolve every controverted issue.” (Saxena v. Goffney (2008) 159 Cal.App.4th 316, 329.) Here, a draft of the special verdict form was approved by both of counsel and the court; the draft provided that if the jury answered queries 1 through four “yes” (the previously mentioned elements of the sexually hostile workplace cause of action found true by the jury), then the jury was to proceed to answer questions 5 and 6, which posed the questions of subjective perception of hostility, and, if so, whether such was a substantial factor causing respondent harm. Respondent Taylor’s counsel prepared the final copies of the verdict forms which erroneously changed the word “yes” above to “no.” Neither the judge nor the attorneys caught the error. The jury never answered questions 5 and 6, nor did anyone catch the error before the jury was discharged.

The appellate court offered two reasons the judgment should not be reversible per se as structural error. It first determined that appellant counsel’s failure to object to the incorrect verdict forms waived the claim of structural error. Second, even if the claim was not forfeited, reversal was not required, in the court’s view, because the defect constitutes harmless error. On this second point, it acknowledges that appellate courts may not “imply findings” to “save” a defective special verdict. But cases so holding have not considered applying the California constitutional principal of determining whether there has been a “miscarriage of justice.” The court then determined that because the judgment here was “clearly right” and that it had no legitimate doubt that appellant was not prejudiced by the error, it would not reverse.

I think it is fair to say that on the matter of defective special jury findings, this opinion goes where no other case has gone. Not only does the trial judge become a thirteenth jury who interprets what the jury would have done if given correct choices, the appellate court becomes the fourteenth , fifteenth and sixteenth jurors in determining the outcome. And the notion of waiver here puts a heavy responsibility on trial counsel to carefully read final copies of jury instructions and verdict forms previously approved, out of concern that opposing counsel may have mistakenly changed the previous approved draft.

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