Friday, July 3, 2009
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Trustee’s Alleged Vulgar Comments Held Not Actionable
By SHERRI M. OKAMOTO, Staff Writer
A trustee who allegedly made sexual comments to the mother of a trust beneficiary in the course of one telephone conversation and one in-person meeting over the course of one day did not engage in actionable harassment, the California Supreme Court ruled yesterday.
The unanimous court affirmed a 2-1 decision by this district’s Court of Appeal upholding Los Angeles Superior Court Judge Andria K. Richey’s decision that the former wife of Herbalife founder Mark Hughes had no cause of action against Christopher Pair, Herbalife’s president, and a trustee of her ex-husband’s estate.
Hughes founded Herbalife International in 1980 and made his fortune on its sales of weight-loss, nutrition and skin-care products through multi-level marketing. His third marriage to Suzan Hughes ended in a contentious divorce in 1998, and he died of an accidental drug overdose at the age of 44 in 2000, leaving a $350 million estate to his only son, Alex, in the form of a trust.
On June 13, 2005, Suzan Hughes requested that the trust provide $160,000 for a two-month rental of a beach house in Malibu for Alex, but the trustees only approved $80,000 for one month.
About two weeks later, she claimed that she received a telephone call from Pair, inviting her and Alex, then aged 13, to accompany him and his 9-year old son to a private showing of the King Tut exhibit that evening at the Los Angeles County Museum of Art.
During that conversation, Hughes said Pair called her “sweetie” and “honey,” and said he thought of her “in a special way, if you know what I mean.”
Hughes testified that she asked Pair why the trustees had not authorized the full payment for the Malibu home she had requested and Pair suggested that he could be persuaded to cast his vote for an additional month if plaintiff would be “nice” to him.
He added: “You know everyone always had a thing for you. You are one of the most beautiful, unattainable women in the world. Here’s my home telephone number and call me when you’re ready to give me what I want.”
Responding to Hughes’ retort that his comments were “crazy,” Pair allegedly said: “How crazy do you want to get?”
Hughes and Alex attended the museum exhibit that evening where they encountered Pair and his son. She claimed that Pair told her: “I’ll get you on your knees eventually. I’m going to f—- you one way or another.”
Hughes subsequently sued Pair for sexual harassment under California’s Civil Code Sec. 51.9, which prohibits sexual harassment in certain business relationships outside the workplace.
Pair denied making the statements in his answer to the complaint and moved for summary judgment, asserting that even if Hughes’ claims were true, she had failed to state a claim for relief.
The trial court granted the motion, finding that sexual harassment under Sec. 51.9, could not be interpreted more broadly than it is under the similarly worded state Fair Employment and Housing Act and Title VII of the Federal Civil Rights Act.
A divided Div. Eight affirmed, with Justice Sandy R. Kriegler explaining that Pair’s alleged statements were not “pervasive” or “severe” within the meaning of either federal or California employment discrimination law, and those statements were likewise insufficient to meet Sec. 51.9’s express requirement that the complained-of conduct be “pervasive or severe” before liability for sexual harassment could be imposed.
Justice Orville A. Armstrong dissented, arguing that the presence of the words “pervasive or severe” in Sec. 51.9 did not indicate an intent by the Legislature to import into that statute the holdings of court decisions that have construed California and federal employment discrimination laws as imposing liability for sexual harassment only when the conduct is “pervasive” or “severe.”
Writing for the Supreme Court, Justice Joyce L. Kennard noted that Sec. 51.9 became law 30 years after the enactment of Title VII by the United States Congress and nine years after California’s Legislature decreed sexual harassment to be a violation of the FEHA.
Sec. 51.9’s use of terms having a well-settled judicial construction indicated that those terms retained the same meaning that the courts have placed upon them, she explained, so Sec. 51.9’s “pervasive or severe” standard was identical to the test courts have applied to actionable hostile work environment claims under both Title VII and the FEHA.
To be “pervasive,” Kennard said that sexually harassing conduct must establish a hostile environment that alters the conditions of the underlying professional relationship and Pair’s alleged conduct was insufficient to meet this standard.
Additionally Kennard reasoned that Pair’s alleged remark at the museum, though “vulgar and highly offensive,” could not plausibly be construed by a reasonable trier of fact as a threat to commit a sexual assault.
She suggested the alleged comment would more reasonably be construed as a threat of financial retaliation, adding that such a threat also would not constitute “severe” harassing conduct.
As Hughes did not allege Pair followed through on his threat to cause financial injury or hardship to her or her son because she rejected his sexual overtures, Kennard concluded that Hughes did not establish a Sec. 51.9 violation based on the quid pro quo form of sexual harassment either.
Viewed in the context of Hughes’ five-year legal battles with the trustees of her ex-husband’s estate, Kennard also concluded Hughes had failed to establish extreme or outrageous conduct by Pair exceeding all bounds of that usually tolerated in a civilized community or to demonstrate sufficient upset to support her claim for intentional infliction of emotional distress.
Hillel Chodos and Deborah Chodos represented Hughes while Melanie C. Ross of Knee, Ross & Silverman represented Pair. June Babiracki Barlow, Neil Kalin and Grant Michiaki Habata represented the California Association of Realtors as Amicus Curiae for Pair.
The case is Hughes v. Pair, 09 S.O.S. 4121.
Copyright 2009, Metropolitan News Company