Alexander v. Cmty. Hosp. of Long Beach

• Decision Date: 13 February 2020
• Docket Number: B279155, B280916
• Citation: 46 Cal.App.5th 238,259 Cal.Rptr.3d 340
• Court: California Court of Appeals Court of Appeals
• Parties: Judy ALEXANDER et al., Plaintiffs and Respondents, v. COMMUNITY HOSPITAL OF LONG BEACH et al., Defendants and Appellants.

46 Cal.App.5th 238

259 Cal.Rptr.3d 340

Judy ALEXANDER et al., Plaintiffs and Respondents,

v.COMMUNITY HOSPITAL OF LONG BEACH et al., Defendants and Appellants.

B279155, B280916

Court of Appeal, Second District, Division 1, California.

Filed February 13, 2020

Lewis Brisbois Bisgaard & Smith, Raul L. Martinez, Gary M. Lape, John L. Barber, Laura J. Anson, Los Angeles, for Defendant and Appellant Community Hospital of Long Beach.

Horvitz & Levy, Jason R. Litt, Bradley S. Pauley, Burbank; Gordon & Rees, Don Willenburg, Oakland, for Defendants and Appellants Memorial Psychiatric Health Services, Inc., and Memorial Counseling Associates Medical Group, Inc.

Law Offices of Maryann P. Gallagher, Maryann P. Gallagher, Los Angeles; Law Office of Shawn Dantzler, Shawn M. Dantzler, Beverly Hills; Benedon & Serlin, Douglas G. Benedon, Woodland Hills, Gerald M. Serlin, for Plaintiffs and Respondents.

CHANEY, J.

A jury found that a hospital and medical group created a hostile work environment and wrongfully discharged three nurses based on their opposition to a supervisor’s harassment, using a pretext that the nurses had abused a patient. The nurses soon found new jobs, but a year later lost them when the State of California filed criminal charges against them for the patient abuse. They were acquitted of the charges. The jury awarded the nurses substantial past and future economic and noneconomic damages suffered up to and after—but not during—their second round of employment. The hospital and medical group appeal, and the nurses cross-appeal.

The hospital and medical group contend insufficient evidence supported the verdict in several respects, the jury improperly awarded damages caused by the criminal prosecution, and the trial court made prejudicial evidentiary errors. The medical group further contends the nurses failed to exhaust their administrative remedies as to it. The nurses argue a second medical group should have been found liable as an alter ego of the first.

We conclude plaintiffs failed to exhaust their administrative remedies against the medical group; insufficient evidence supported some of the jury’s findings and its damages awards; and the court made several prejudicial evidentiary errors. We also conclude the second medical group may not be held liable on an alter ego theory. We therefore reverse the judgment and remand the matter for further proceedings.

BACKGROUND

As this matter is before us on appeal from a judgment in favor of the nurses after a jury trial, we view the evidence in favor of the judgment. ( Roby v. McKesson Corp . (2009) 47 Cal.4th 686, 694, 101 Cal.Rptr.3d 773, 219 P.3d 749.)

I. The Nurses’ Employment

A. Community Hospital

1. Employment Structure

Judy Alexander, Johann Hellmannsberger, and Lisa Harris worked as nurses in the Behavioral Health Unit of Community Hospital of Long Beach (Community Hospital or simply the hospital). All received good reviews.

In 1989, in response to Community Hospital’s predecessor’s announced plan to close its psychiatric unit, eight psychiatrists founded two corporations to take over the unit’s operations. The first, Memorial Psychiatric Health Services (MPHS), an S-Corporation, was founded to run the hospital’s locked mental health ward. The second, Memorial Counseling Associates Medical Group (MCA), a professional C-corporation, would supply physicians for patients in the ward.

Community Hospital, which no longer operates, contracted with MPHS to operate its Behavioral Health Unit. Pursuant to the agreement MPHS provided administrative services for the unit and employed and managed its director, Keith Kohl. Kohl’s direct supervisor was Jill Schmidt, MPHS’s Vice-President of Operations.

The hospital separately contracted with MCA to provide physicians for the unit.

Personnel issues involving employees other than Kohl or the physicians were managed by Valerie Martin, the hospital’s human resources director.

2. Alexander Complained about Kohl’s Conduct

As director of the Behavioral Health Unit, Kohl discriminated in favor of male staff—particularly gay men—with respect to scheduling, assignments and promotions; rewarded male employees with gift certificates based on their attire; and regularly used sexually explicit language that favored homosexuality and denigrated heterosexuality.

Alexander felt demeaned and humiliated by Kohl and fearful of his reprisals. She complained four or five times to Adrian Taves, the hospital’s director of education, that Kohl was "flamboyantly gay," but was told there was nothing inappropriate about gay mannerisms, and simply to avoid Kohl.

A few weeks before she was terminated, Alexander complained to Taves that Kohl had berated her in his office, and was told to take the complaint to Martin, the human resources director. But Martin told her that the last person who had complained about Kohl was no longer employed by the hospital, and asked Alexander if she was sure she really wanted to make that complaint. Alexander left human resources without filing a formal complaint, and eventually transferred to the night shift to avoid Kohl.

3. The "Hailey" Incident

During the night shift of April 15, 2009, one of the patients, "Hailey," was yelling, cursing, pacing, punching and kicking the walls. When she threatened Hellmannsberger with violence, Harris and Hellmannsberger each took one of her arms and escorted her to an open seclusion room, which had only a bare bed with no physical restraints. Hailey continued to pace, curse, and kick the walls, and told Hellmannsberger she wanted her "fucking shot" of anti-anxiety medication.

Hellmannsberger obtained a physician’s order for the medication, declined the doctor’s offer of a physical restraint order, and instructed Alexander to prepare the dosage. In response to Harris’s call to another wing, Nurses Dale Ortiz and Russell Green and mental health worker Shenae Berry came to assist. Hailey cooperated, and Alexander administered the shot, after which Hailey calmed down.

4. Plaintiffs’ Termination

The next day, Green and Berry reported to Anthony Pace, the Behavioral Health Unit’s Clinical Coordinator, that Hailey had been placed in physical restraints without a physician’s order. Pace told Kohl, who told Martin and Tammy Alvarez, the hospital’s Chief Nursing Officer. Kohl, Martin and Alvarez decided to suspend Alexander, Harris and Hellmannsberger pending an investigation.

Kohl obtained written statements from Berry (written by her sister) and Green that Hailey had been put in physical restraints. Ortiz, however, told Kohl that Hailey had never been in physical restraints, and was administered only a chemical restraint pursuant to a physician’s order.

Kohl instructed Alexander not to report to work for her evening shift, and the next morning, a Friday, he, Martin, and Alvarez suspended her for having placed a patient in physical restraints without a physician’s order.

Pace also suspended Harris and Hellmannsberger.

On Monday, April 20, 2009, Martin terminated Alexander. After she stated she would fight the termination, Martin told Alexander she was also being fired for time card fraud relating to a class she had taught some weeks earlier.

Kohl, Martin, Alvarez and Pace offered to let Hellmannsberger keep his job if he would corroborate that Alexander had put Hailey in restraints. Hellmannsberger refused, and was fired.

Martin, Alvarez, and Kohl made the same offer to Harris, who also refused and was fired.

B. College Hospital and Criminal Prosecution

Within approximately two months of their termination by Community Hospital, the three nurses found employment at College Hospital in Brea.

Community Hospital reported the Hailey incident to licensing authorities, who notified the Department of Justice. In June 2010, a year into their new employment, the department arrested and prosecuted Alexander, Hellmannsberger and Harris for the illegal restraint of Hailey.

College Hospital suspended the nurses following their arrests, and ultimately terminated their employment.

A jury later acquitted the three nurses of the criminal charges.

C. Post-Acquittal Employment

As a result of her termination from College Hospital, Alexander lost her home and lived in her car for a while before moving in with her aunt and eventually finding new work.

Hellmannsberger actively sought work for a year and a half before eventually finding a job as a staff nurse.

Harris passed away in September 2014, having never found another job. Her son was substituted as a plaintiff.

D. Post-Termination Complaints About Kohl by Other Employees

A few weeks after Community Hospital fired the three nurses, hospital staff complained to MPHS and the hospital that Kohl had created a hostile work environment by favoring male employees, particularly gay males, and openly discussing his sex life in the workplace. Ana Marie Mesina, MPHS’s human resources manager, spoke with Kohl, who denied the allegations. During the conversation Mesina learned about the Hailey incident, and requested supporting documentation for the nurses’ terminations. Kohl never provided it.

Approximately a year later, Mesina received another complaint about Kohl from Lisa Jackert, a Hospital Senior Case Manager, but conducted no investigation. After receiving a third complaint about Kohl, Mesina issued him a verbal warning.

In July 2010, more than a year after the nurses were fired, the hospital demanded that MPHS remove Kohl as Director of the Behavioral Health Unit for having "created a hostile work environment." MPHS responded that Kohl’s behavior was "exactly fine," and presented no harassment issue. MPHS nevertheless removed Kohl from his position after the hospital insisted that it do so pursuant to its management services contract.

II. Lawsuit

A. FEHA Complaints

Alexander, Hellmannsberger and Harris filed administrative complaints with the Department of Fair Employment and Housing (DFEH) naming the hospital, Keith Kohl, and Anthony Pace as potential defendants. They alleged gender and sexual...