Metropolitan News-Enterprise

 

Friday, August 12, 2022

 

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$1 Million Emotional-Distress Award in Favor of Estate Must Be Restored—C.A.

Opinion Says Ruling Against Liability Was Correct When Made but Intervening Statute Requires Reversal

 

By a MetNews Staff Writer

 

The Court of Appeal has reinstated an award of nearly $1 million to an estate based on emotional distress the decedent had suffered through ill treatment at a residential care facility, holding that although a Los Angeles Superior Court judge correctly scuttled that award under then-existing law, a statutory change occurring while the case on appeal now requires reversal.

However, the trial court’s denial of a sought-after award of $1,142,420 in attorney fees was affirmed.

The decisions came in an unpublished opinion filed on Wednesday. Presiding Justice Nora M. Manella authored it.

The lawsuit was brought on April 1, 2016, by Milton Glass—the former financial officer of what was then the Gillette Company, who also held, over a long business career, other key executive positions—and Renée Glass, his wife of 68 years. Milton Glass died at age 88 on Nov. 23, 2017, from complications of Parkinson’s disease.

A jury on Nov. 11, 2019, awarded the estate precisely $1.5 million—comprised of $500,197 in economic damages and $999,803 for the emotional distress suffered by Milton Glass while a resident of Fairwinds West Hills. West Hills is an area of the community of Canoga Park in the San Fernando Valley.

The jury found liability based on negligence and breach of contract, determining that Leisure Care, LLC, was 50 percent at fault, and its shell corporation, Whilst, LLC, was likewise half to blame.

Judge Cotton’s Action

Los Angeles Superior Court Judge Huey P. Cotton lopped $999,803 from the award based on Civil Procedure §377.34, which then read, in its entirety:

“In an action or proceeding by a decedent’s personal representative or successor in interest on the decedent’s cause of action, the damages recoverable are limited to the loss or damage that the decedent sustained or incurred before death, including any penalties or punitive or exemplary damages that the decedent would have been entitled to recover had the decedent lived, and do not include damages for pain, suffering, or disfigurement.”

However, §377.34 was amended, effective Jan. 1 of this year. The original wording is now subd. (a) and a new subd. (b) provides:

 “Notwithstanding subdivision (a), in an action or proceeding by a decedent’s personal representative or successor in interest on the decedent’s cause of action, the damages recoverable may include damages for pain, suffering, or disfigurement if the action or proceeding was granted a preference pursuant to Section 36 before January 1, 2022, or was filed on or after January 1, 2022, and before January 1, 2026.”

Renée Glass had been granted a preference prior to Jan. 1, 2022.

Manella’s Opinion

 Manella declared:

“The only basis the court gave to reduce the negligence damages awarded to Milton’s estate was that section 377.34 precluded the recovery of emotional distress damages under a tort theory (a conclusion Renee concedes was correct when made). As recently amended, section 377.34 no longer precludes this recovery, and respondents have proffered no other reason to justify the reduction. We therefore reverse the court’s reduction of the negligence damages awarded to Milton’s estate.”

In a footnote, the author said:

“Because our decision restores the entirety of the damages awarded to Milton’s estate, we need not consider whether the estate was entitled to emotional distress damages under a breach of contract theory, or whether the prior iteration of section 377.34 barred recovery of emotional distress damages awarded for breach of contract.”

Attorney Fees

Manella found that attorney fees in favor of the estate were properly denied. A contract entered into by the Glasses and the care facility provides that any legal dispute was to be submitted to mediation and, if an agreement was not reached, to binding arbitration.

The parties mediated, with no accord reached, then litigated in court with neither party seeking to compel arbitration. The agreement specifies:

“The non-prevailing party in any such mediation or arbitration, as determined by the mediator or arbitrator, shall pay the prevailing party’s court costs and attorneys’ fees.”

The estate moved in the Superior Court for a post-judgment award of attorney fees, but Cotton denied the motion, finding that the contractual provision applied only where attorney fees were awarded by a mediator or arbitrator. He ruled:

“The plaintiffs opted to avail themselves of the advantages of a civil trial with rights to a jury and cannot demand the court read rights into the contract that do not exist.”

Agrees With Cotton

Manella said: “We agree.”

She reasoned:

“Had the parties intended to provide for an award of attorney fees to the prevailing party in all forums, they could have accomplished this easily, either by omitting the references to mediation and arbitration, or by inserting references to courts and court proceedings. By instead stating fees would be awarded to the prevailing party in a mediation or arbitration, the clause necessarily excluded the prevailing party in other forms of dispute resolution, such as a lawsuit filed in court.”

The opinion accepts the prospect of a mediator determining the prevailing party and awarding attorney fees, an unfamiliar occurrence in light of the traditional role of a mediator in seeking simply to bring about a voluntary settlement by the parties. The estate contended that the provision therefore created an ambiguity to be resolved in favor of what must have been the parties’ intent to create fee-shifting, upon resolution of the dispute, at any stage.

Manella cited a Rutter Group practice guide for the proposition that “the parties may agree to empower the mediator to render a binding decision if the mediation reaches an impasse” and pointed to a May 30, 2012 decision by Div. One of the Fourth District Court of Appeal in Bowers v. Raymond J. Lucia Companies, Inc. saying that such an agreement must be given effect.

She said:

“Here, the parties provided that any mediation would be ‘governed by the rules and procedures of the American Arbitration Association, unless otherwise agreed.’ In other words, the Resident Agreement permitted binding mediation if the parties agreed; nothing suggests a mediator could not determine a prevailing party, and indeed, the language of the agreement expressly authorized the mediator to do so.”

The case is Glass v. Whills, B304806.

Pasadena attorney Marilyn M. Smith, who was the trial lawyer for the Glasses, on appeal joined with appellate lawyer Wendy C. Lascher of the Ventura firm of Ferguson Case Orr Paterson in arguing for Renée Glass and the estate. Jeffry A. Miller, Lann G. McIntyre, Ernest Slome, Kathleen M. Walker, and Kevin L. Eng of Lewis Brisbois Bisgaard & Smith represented Whills, LLC and Leisure Care, LLC.

 

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