Thursday, July 5, 2018
Court of Appeal:
County Didn’t Skimp in Paying on $1.85 Million Settlement
Rothschild Says Doctor Who Sued Over Firing Got All He Was Promised Under Accord
By a MetNews Staff Writer
A doctor who was fired by the County of Los Angeles as chief medical officer at Harbor-UCLA Medical Center, brought suit, and received a $1.85 million settlement, has failed to persuade the Court of Appeal for this district that the county shortchanged him by $173,325.04 in making its payment.
Presiding Justice Frances Rothschild of Div. One wrote the opinion which rejected the contention by Dr. Gail Anderson Jr. that the county wrongfully deducted from the payout the sum it routed to the Los Angeles County Employees Retirement Association (“LACERA”), in the form of a mandated employer’s contribution toward retirement benefits. The opinion was filed Monday and not certified for publication,
Under an agreement settling the 2012 action Anderson brought over his dismissal, the plaintiff was to receive back pay for the period from July 10, 2012, when he went off the county’s payroll, to May 31, 2014, minus deductions. The gross amount of the back pay totaled $787,250.91 (slightly more than the $740,000 going to Anderson’s lawyers).
With deductions, the county tendered to Anderson $471,631.82 (in addition to $49,886.87 in damages). He balked at the deduction of the payment to LACERA—arguing that the contribution was the employer’s responsibility, not his—and brought a new suit based on breach of contract.
Los Angeles Superior Court Judge Mark V. Mooney awarded summary judgment to the county on Anderson’s action, and denied the county’s motion for attorney fees. Both sides appealed.
Explaining affirmance of summary judgment in favor of the county, Rothschild pointed to a provision in the settlement agreement that designated $1.85 million “as the total and complete amount of settlement funds.”
“The agreement explicitly limits the County’s total expenditure to $1,850,000.
“Consequently, the County did not breach the agreement by deducting the employer’s portion of the retirement payments from the amount owed to Anderson.”
Rothschild declared that in light of the cap on the pay-out, there is “only one reasonable interpretation: the County’s duty to pay the employer’s share of Anderson’s back wages was included in its obligation to pay $1,850,000 under the contract.”
Anderson protested that there is no legal authority for a county to shift to an employee the burden of paying the employer’s compulsory contribution to the retirement fund. The jurist responded:
“If Anderson had sued the County because the County deducted the employer’s share of his retirement benefits from his paychecks, this law might be dispositive. But this is not such a case. Instead, this case presents the question of whether the County’s payment of its share of an employee’s retirement benefits may count toward the maximum payment to the employee under the terms of a settlement agreement. We see no reason why it may not, and we find the discussion of the way in which counties ordinarily fund their pension obligations irrelevant.”
The county sought attorney fees pursuant to Code of Civil Procedure §1038 which authorizes such awards in favor of a public entity where a failed action was not brought “in good faith and with reasonable cause.” Rothschild wrote:
“Although we agree with the County and the trial court that Anderson’s proposed interpretation of the settlement agreement was incorrect, it was not so outlandish as to lack reasonable cause or to raise questions about Anderson’s good faith. The settlement agreement and the law regarding employer contributions to retirement accounts are complex enough that a reasonable attorney could have believed Anderson’s claims were tenable.”
The case is Anderson v. County of Los Angeles, B279304.
David P. Pruett of Carroll, Kelly, Trotter, Franzen, McKenna & Peabody represented Anderson and Jeffrey M. Hausman and Larry D. Stratton of Hausman & Sosa acted for the county.
Underlying the matter addressed Monday are facts in connection with the county’s disenchantment with Anderson, who had been at his post for more than 12 years. In August 2011, the doctor was escorted out of the hospital and placed on paid administrative leave.
During the pendency of administrative proceedings, he received full salary while remaining at home each work day, as mandated by the county. In 2011, he was the county’s second highest-paid employee, garnering $555,217 in salary and benefits.
In a letter of discharge in July 2012, Dr. Mitchel Katz, director of the county Department of Health Services (“DHS”), alleged the Anderson was guilty of a “lack of leadership, poor judgment, misrepresentations to executive management and blatant disregard for DHS and county policy.”
Pointing to a particular impression which Anderson was seen to have falsely created, Katz said:
“On five documented occasions you represented to management you were participating in clinical care, which management concluded based on your representation that you were providing direct patient care.”
A directive had been issued in the spring of 2011 that chief medical officers at county hospitals were to be personally involved in providing patient care. Anderson, it was found, reported his participation in the emergency facility at Harbor-UCLA without revealing that he did not have staff privileges there and was merely observing.
In connection with the settlement, it was agreed that Anderson would be restored to his post at Harbor-UCLA, but, Rothschild’s opinion notes, with the proviso that he would tender a letter of resignation. That condition was apparently not publicly disclosed when the settlement was announced; the Daily News recited:
“In settlement over the litigation, Anderson received back pay and was offered his old job back as head of the hospital in an unincorporated area of the county near Torrance. Almost immediately after he was reinstated, he decided to retire, according to county spokesman Joel Sappell. Anderson did not return to work at the hospital.”
Anderson, 70, now practices emergency medicine in South Pasadena.
His father, Dr. Gail Anderson Sr., who practiced at County-USC Medical Center and died in 2014, was a pioneer in establishing emergency medicine as a specialty.
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