Paletz v. Adaya

• Decision Date: 29 December 2014
• Docket Number: B247184
• Court: California Court of Appeals Court of Appeals
• Parties: SCOTT A. PALETZ et al., Plaintiffs and Respondents, v. TEHMINA ADAYA et al., Defendants and Appellants.

SCOTT A. PALETZ et al., Plaintiffs and Respondents, v. TEHMINA ADAYA et al., Defendants and Appellants.

B247184

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE

December 29, 2014

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. SC110870)

APPEAL from a judgment of the Superior Court of Los Angeles County, Chester Horn, Jr., Judge. Affirmed in part, reversed in part, and remanded in part.

Gibson, Dunn & Crutcher, Marcellus A. McRae, Kahn A. Scolnick and Kimberly A. Nortman for Defendants and Appellants.

Dickstein Shapiro, James H. Turken and Christopher Kadish for Plaintiffs and Respondents.

INTRODUCTION

Defendants Tehmina Adaya and Indus Investments Inc., doing business as Shangri-La Hotel, appeal from the jury's verdict finding that Defendants discriminated against Plaintiffs in violation of the Unruh Civil Rights Act. The litigation arises out of Defendants' refusal to provide services at a hotel event to the individual Plaintiffs because they were Jewish. Plaintiff Platinum, an event promoting company, also sued Defendants for contract and tort causes of action related to the event. Defendants assert many grounds on appeal regarding sufficiency of the evidence, improper evidentiary rulings, standing, inconsistent verdicts, duplicative recovery, jury instruction errors, and improper apportionment of attorney fees awards. We affirm the jury's verdict awarding actual damages and statutory penalties under Unruh as it is supported by substantial evidence and any evidentiary concerns raised by Defendants were harmless error. We reverse the duplicative award of punitive damages stemming from intentional infliction of emotion distress. We reverse and remand the court's award of attorney fees to the extent that it abused its discretion in unreasonably apportioning attorney fees associated with Plaintiff Platinum's causes of action.

FACTS AND PROCEDURAL BACKGROUND¹

Defendant Adaya is an owner and operator of Defendant Shangri-La Hotel in Santa Monica, California. Plaintiff Platinum, an event promoter, had previously worked with Shangri-La to orchestrate events and parties at the hotel. In June 2010, Platinum began arranging Sunday pool parties at Shangri-La. Platinum set up the July 2010 pool party at issue in this case for the Young Leadership Group of the Friends of the Israeli Defense Forces (FIDF) to fundraise for children of fallen Israeli soldiers to attend camp in the United States.

Plaintiff Scott Paletz, who is the managing member of Platinum, and FIDF event organizers toured the Shangri-La facilities with the Shangri-La events manager The events manager agreed that Shangri-La would provide FIDF with a private area marked by stanchions, pool access, towels, and drink specials, all at no charge. Paletz met with Shangri-La's general manager and its food and beverage director, Nathan Codrey, to finalize arrangements for the pool party several times thereafter.

On the morning of the pool party, Shangri-La provided to FIDF a check-in table and towels, and cordoned off an area of the pool with stanchions and ropes for FIDF's pool party guests. FIDF placed brochures, literature, and t-shirts on the tables, and displayed two 6-foot banners. FIDF checked guests in, giving them blue bracelets and FIDF t-shirts.

During the beginning of the pool party, Adaya was watching the World Cup in her poolside cabana. When she exited her cabana, she saw FIDF's guests in and around the pool, the banners and tables with literature, and the FIDF t-shirts on display. She summoned one of her security personnel to obtain a pamphlet for her review. The security guard walked over to the table, requested a pamphlet, and told the FIDF member at the check-in table that Shangri-La's owner wanted to know what the group was about. The pamphlet described FIDF and the program for which the pool party was fundraising. The security guard brought it to Adaya, who then became noticeably agitated and passed the pamphlet to others sitting with her.

Adaya then contacted Codrey, the food and beverage director who had worked with Platinum to set up the pool party. When Codrey arrived at the hotel, Adaya told him "I don't want any [f---ing] Jews in the pool." Although Adaya did not make this statement directly to Plaintiffs, Codrey told Paletz and possibly others that Adaya made this statement. Codrey conveyed to some of the Plaintiffs that Adaya wanted the event shut down because they were Jewish. Adaya further told Codrey that "[i]f my parents find out that there is a Jewish event here, they're going to pull money from me immediately."

Per Adaya's instruction, Shangri-La staff systematically shut down FIDF's pool party. Hotel staff singled out FIDF guests, identifiable by their blue wristbands, and removed them from the pool, while other hotel guests and non-guests were allowed to stay in the pool. Shangri-La staff required FIDF members to remove their banners. The staff locked the entrance gate to the pool to prevent FIDF attendees from entering or reentering the pool area. Pool staff removed the towels provided for FIDF's event and had FIDF remove the t-shirts from the tables. Shangri-La security removed the ropes and stanchions that delineated FIDF's private area at the pool. Staff also ordered all event attendees to remove their FIDF event t-shirts. Those FIDF event attendees who remained at the pool after the event was dismantled, were permitted to stay in the pool area. During this series of events, Adaya and her husband sat in a cabana next to the pool area and stared down the FIDF members for at least an hour to an hour and a half, generating a lot of tension between the parties.

The Plaintiffs became aware of Adaya's discriminatory intent either by hearing her statements from Codrey or other attendees, witnessing her behavior, or directly hearing Adaya make comments regarding FIDF's removal from the pool. For instance, one Plaintiff saw Adaya become very agitated and heard her raise her voice, instructing the security guard to "get them out, get them out, get them out." While in the restroom, a different Plaintiff overheard Adaya ask a non-Jewish woman, "[d]o you want me to get these people off the lounge chairs?" Codrey, a hotel employee, repeatedly apologized for Adaya's actions, once calling it "blatant anti-Semitism."

Plaintiffs Paletz, Stephen C. Fowler (an independent contractor of Platinum), and sixteen individuals, who were FIDF guests at the pool party, sued Defendants Adaya and Shangri-La for (1) discrimination under Unruh Civil Rights Act, Civil Code section² 51, (2) intentional infliction of emotional distress, (3) negligent infliction of emotional distress, and (4) negligence. Plaintiff Platinum sued Shangri-La for breach of contractand related causes of action. At trial, the court admitted Codrey's deposition testimony regarding Adaya's statements made to him at the pool. Plaintiffs also testified at trial to the statements Codrey made to them at the pool, conveying the derogatory remarks made by Adaya. Some Plaintiffs testified to hearing Adaya's derogatory statements third or fourth hand from other FIDF guests at the pool. Over Defendants' objections, the court additionally admitted expert testimony from a Rabbi, which characterized Adaya's behavior as anti-Semitic and discussed the Plaintiffs' reaction to the events that occurred at Shangri-La. The court permitted evidence that Adaya was Pakistani and Muslim, again over Defendants' objections. After a 10-day trial followed by six days of jury deliberation, the jury returned a verdict in favor of Plaintiffs.

The jury found that Defendants had discriminated against each individual Plaintiff in violation of Unruh. The jury found that Defendants had been negligent and committed negligent infliction of emotional distress toward various Plaintiffs. The jury also found that Defendants had intentionally inflicted emotional distress on 11 Plaintiffs. Each individual Plaintiff was awarded compensatory damages and Unruh statutory penalties against Defendants; these combined awards ranged from $26,000 to $180,000 for each Plaintiff. In a separate, second phase of the trial, the jury also awarded $405,000 in punitive damages to the 11 individual Plaintiffs that it determined to be victims of intentional infliction of emotional distress. The punitive damage awards ranged from $25,000 to $80,000 for each of the 11 individuals. Adaya and Shangri-La were each 50 percent responsible for damages.

The jury further determined that Shangri-La had breached its oral agreement with Platinum, breached the implied covenant of good faith and fair dealing, made negligent misrepresentations, and negligently and intentionally interfered with a prospective economic advantage. The jury awarded Platinum $11,250 in damages and $40,000 in punitive damages for intentional interference with prospective economic advantage.

Collectively, Plaintiffs were awarded $1,654,250. The court additionally awarded the individual Plaintiffs $2,099,785.50 in attorney fees on Unruh Act claims, along with costs amounting to $40,911.47. Notably, the same law firm represented all Plaintiffs. Defendants filed motions for a new trial and for judgment notwithstanding the verdict; both were denied.

DISCUSSION

Defendants raise many issues on appeal, arguing that: (1) there is insufficient evidence to support a finding of unlawful intent for the intentional infliction of emotional distress and Unruh Act claims; (2) the court abused its discretion on evidentiary rulings related to hearsay, expert testimony, and character evidence, warranting reversal; (3) one Plaintiff lacked standing to...