Monday, August 17, 2009
Court Reverses Fee Award to School in Hate-Crimes Case
By SHERRI M. OKAMOTO, Staff Writer
A student who filed suit against his former school alleging liability for death threats he received from classmates based upon their perception of his sexual orientation could not be held responsible for arbitral expenses and attorney fees after an arbitrator found in favor of the school, this district’s Court of Appeal ruled Friday.
Div. One said that the minor, identified as D.C., and his parents did not have to bear expenses incurred by Harvard-Westlake School totaling over $500,000 that would not have been imposed on them if the hate crime claim had been heard in a court.
While D.C. was a student at the private college preparatory academy, he maintained a website to promote his career as a singer and actor. This website allowed any member of the public to post comments in an online “guestbook.”
Several derogatory comments about D.C. were made including some threats making reference to a misperception that D.C. was a homosexual, he claimed. These comments were allegedly made by Harvard-Westlake students using the school’s computers.
D.C.’s father informed school officials and law enforcement of the threats, and on advice from the Los Angeles Police Department, withdrew his son from Harvard-Westlake. The family then moved to another part of the state and enrolled D.C. in a new school.
Harvard-Westlake never suspended or expelled any of the students who admitted posting the threats.
D.C. and his parents eventually filed suit against the school, alleging negligence; assault upon another with death threats and hate crimes; conspiracy to assault another with death threats and hate crimes; invasion of privacy; conspiracy to invade the privacy of another; defamation; conspiracy to defame another; intentional infliction of emotional distress; conspiracy to inflict emotional distress on another; negligent infliction of emotional distress; and fraud in the inducement of a contract. A statutory hate crimes claim was not pled.
The case was assigned to Los Angeles Superior Court Judge Victor H. Person, now retired, who granted the school’s petition to compel arbitration pursuant to the terms of Harvard-Westlake’s “Enrollment Contract,” signed by D.C.’s father.
Arbitration commenced before retired Orange Superior Court Judge Judith M. Ryan of JAMS in November 2005.
Ryan granted the school’s motion for summary disposition as to some of D.C.’s claims and later ruled on the surviving claims in favor of Harvard-Westlake.
She also concluded that the school was the prevailing party for purposes of the attorney fee provision in the Enrollment Contract and ordered D.C. to pay a total of $521,227, representing the full amount requested by the school for its arbitral expenses and attorney fees.
Los Angeles Superior Court Judge Ernest M. Hiroshige later confirmed the arbitration award.
Writing for the appellate court, Presiding Justice Robert M. Mallano explained that the statutory rights established by California’s hate crimes laws cannot be waived.
He began his analysis with Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, which held that an employer who imposes arbitration of disputes as a condition of employment was obligated to pay all of its employee’s costs “unique to arbitration” in order to prevent such expenses from deterring plaintiffs from pursuing discrimination claims under the Fair Employment and Housing Act.
Mallano analogized Armendariz to Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, which held that a common law claim for wrongful termination of employment must be arbitrated without imposing costs that would not be incurred in court, noting that both involve “a fundamental public policy tethered to a statute or constitutional provision.”
The justice contrasted Armendariz and Little with Boghos v. Certain Underwriters of Lloyd’s of London (2005) 36 Cal.4th 495, which held that Armendariz did not apply to a dispute of private concern—an insured’s contention that his insurer wrongfully discontinued his benefits.
“The Armendariz-Little-Boghos trilogy recognizes that certain rights— unwaivable statutory rights or fundamental rights delineated in constitutional or statutory provisions—are so important in our society that their enforcement should not be chilled by the threat of expenses unique to arbitration,” Mallano said.
He reasoned that D.C.’s rights under the state hate crimes laws were “legally indistinguishable” from the rights at issue in Armendariz and Little, because claims vindicating those rights “should not be discouraged by the possibility that the alleged victim will incur arbitral expenses beyond the costs payable in court.”
Since the imposition of arbitral expenses could potentially deter the pursuit of D.C.’s unwaivable statutory rights, Mallano concluded the award of fees was inappropriate.
Additionally, because an agreement to arbitrate a statutory claim implicitly incorporates the substantive and remedial provisions of that statute and California’s hate crime statutes expressly provide a “one-way” award of attorney fees to a prevailing plaintiff and not to a prevailing defendant, Mallano said the statutes invalidated the arbitrator’s award of attorney fees.
Specially assigned Los Angeles Superior Court Judge Rita Miller joined Mallano in the decision, but Justice Frances Rothschild dissented.
Absent any indication in the record that D.C. raised a claim before the arbitrator regarding the illegality of the award, Rothschild contended that such an argument was waived for any future judicial review.
As D.C.’s hate crimes claim was “so patently meritless that the arbitrator rejected it at the pleading stage …” the justice argued, “[p]laintiffs should not be permitted to prolong these proceedings by using their frivolous hate crimes claim as a means to avoid liability for attorney’s fees and costs, even in part.”
Los Angeles attorney Robert S. Gerstein and Cardiff by the Sea lawyer Jennifer L. Lynch represented D.C., while Stuart W. Rudnick and Kent A. Halkett of Musick, Peeler & Garrett represented the school.
The case is D.C. v. Harvard-Westlake School, 09 S.O.S. 4920.
Copyright 2009, Metropolitan News Company