Filed 2/13/20; Certified for publication 3/10/20 (order attached)




IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    SECOND APPELLATE DISTRICT

                                 DIVISION ONE

JUDY ALEXANDER et al.,                                    B279155, B280916

        Plaintiffs and Respondents,                       (Los Angeles County
                                                          Super. Ct. No. BC426353)
        v.

COMMUNITY HOSPITAL OF LONG
BEACH et al.,

        Defendants and Appellants.


      APPEAL from a judgment of the Superior Court of Los
Angeles County, Michael Johnson, Judge. Reversed with
directions.
      Lewis Brisbois Bisgaard & Smith, Raul L. Martinez, Gary
M. Lape, John L. Barber, Laura J. Anson for Defendant and
Appellant Community Hospital of Long Beach.
      Horvitz & Levy, Jason R. Litt, Bradley S. Pauley; Gordon &
Rees, Don Willenburg 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; Law Office of Shawn Dantzler, Shawn M. Dantzler;
Benedon & Serlin, Douglas G. Benedon, Gerald M. Serlin for
Plaintiffs and Respondents.
               ___________________________________
       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




                                2
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.)
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.




                                3
      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




                                 4
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




                                5
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.




                                6
       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 orientation discrimination, and retaliation in




                                7
violation of the Fair Employment and Housing Act. (Gov. Code, §
12900 et seq.; FEHA.)1 The nurses filed a second set of
complaints on July 9, 2009, naming MCA as an additional
potential defendant.
       The DFEH closed the complaints effective July 9, 2009,
because the nurses had requested immediate right-to-sue notices,
and on August 27 the DFEH notified the nurses of their right to
file a civil action within one year of the notice. Right-to-sue
notices were also sent to Kohl and to the human resources
directors at both the hospital and MCA.
       The nurses failed to mention MPHS, Kohl’s actual
employer, in any administrative complaint.
       The nurses filed the instant civil action against the hospital
and MCA on November 19, 2009, asserting causes of action for (1)
sexual harassment; (2) sexual orientation discrimination; (3)
failure to investigate and prevent harassment and
discrimination; (4) retaliation; (5) wrongful termination in
violation of public policy; (6) intentional infliction of emotional
distress; (7) defamation; and (8) negligent supervision. They
alleged that the hospital permitted Kohl to create a hostile work
environment by flaunting his LGBT lifestyle, making sexual
references, and giving preferential treatment to male employees,
and the hospital retaliated against them when they complained.
       The nurses amended their civil complaint on May 21, 2010,
to name MPHS as a Doe defendant. They never filed any
administrative complaint against MPHS.



      1
      Undesignated statutory references will be to the
Government Code.




                                  8
       B.    Civil Trial
       At trial, Alexander testified that Kohl made explicit
references to gay sex while working in the Behavioral Health
Unit, sat on a male nurse’s lap and allowed the nurse to sit on his
lap, told her that a new haircut made her look like a “dyke,” and
gave male nurses preferred shifts, schedules, and work
assignments. She testified that after her arrest and discharge
from College Hospital she “went into depression.”
       Hellmannsberger, a heterosexual male, testified that Kohl’s
demeanor toward women was “less respectful” than toward men,
and “a number of times” he observed Kohl reassign women from
the preferred “A” unit in the Behavioral Health Wing to the less
desirable “B” unit to accommodate male friends who wanted to
work in the A unit. He testified that Kohl and Anthony Pace,
who was unqualified to perform his work tasks, would
“frequently” “spend time together.” (Pace was never identified in
the record as homosexual.) On one occasion Kohl stated he was
“upset” with two of the Filipino nurses, and “tired of the Filipino
mafia.” Hellmannsberger testified that after his arrest and
discharge from College Hospital, he was no longer a “happy,
upbeat social person.”
       Portions of Harris’s deposition testimony were read to the
jury. Harris had testified that she remarked to Kohl that Pace
was unqualified for his position. She asked him whether Pace
had any experience, to which Kohl had replied, “No, not really,
but he has a nice ass.”
       Lectricia Smith, a nurse, testified that on one occasion in
2009 or 2010 she overheard Kohl tell a person working in the
psychiatric unit, whom she could not see or identify, that
plaintiffs had been fired because they committed patient abuse




                                 9
and were going to jail. Smith did not know what had preceded
the statement or what Kohl was doing at the time.
       Patricia Tomlinson Sanchez, a nurse at the hospital,
testified that a memo posted at the A Unit nurse’s station
informed employees they “could not go to HR.” Sanchez testified
the memo purported to be from Jill Schmidt, MPHS’s Vice-
President of Operations, and bore the MCA logo, but Sanchez
could not identify when the memo was posted, by whom or for
how long, nor whether any hospital manager knew about it. Nor
could Schmidt recall anything else the memo said, and the memo
itself was never produced.
       Plaintiffs’ economic expert, Venita McMorris, calculated
Alexander’s loss of earnings as $122,131, Hellmannsberger’s as
$97,165, and Harris’s as $165,677.
       Dr. Lee Yoseloff, the president of MPHS, Ana Marie
Mesina, MPHS’s HR manager, and Valerie Martin, the hospital’s
HR director, testified MPHS and the hospital had zero tolerance
policies regarding sexual harassment and sexual orientation
discrimination.
       In rebuttal to the hospital’s claim that it maintained anti-
harassment policies, plaintiffs offered three letters the hospital
received after plaintiffs were terminated.
       The first, received by the hospital in May 2009, was
anonymously ascribed to “BHU,” the hospital’s behavioral health
unit. It stated that the hospital was “a hostile work
environment,” and Kohl was “encouraging a hostile work
environment” by showing “favoritism to male employees.” The
letter stated that Kohl “gives them gift certificates for dressing a
certain way or coming in to work on time but does not show any
appreciation for the female staff,” and “the 4 people that he has




                                 10
hired have all been males. [Kohl] sits in the office and discusses
his gay sex life with staff,” and “if you’re not male you get no
appreciation, no acknowledgment. . . . [W]hat used to be a well
oiled machine, not perfect but happy is now a very unhappy place
to work.”
       The second letter, dated May 24, 2010, was written by Lisa
Jackert, a Senior Case Manager for the hospital. The letter
stated that on May 18, 2010, Kohl “was discussing a topic not on
the agenda [at a staff meeting] where [he] mentioned that [the
hospital] did not participate in [a] Gay Pride Festival . . . because
‘the hospital is homophobic.’ He went on and basically ‘outed’ two
of the physicians on staff by complaining that they should be
more vocal about marketing . . . the hospital to the gay
community.” When asked whether one of the physicians was gay,
“[Kohl] responded, ‘All you have to do is take one look at her.’ [¶]
He went on to also ‘out’ a newly hired LVN . . . by saying . . . [that
she would have been] willing to be there and stand behind the
hospital’s table.’ ” The letter further stated that Kohl complained
that a hospital ad posted on a bulletin board in the break room
which depicted “a young man with a bare chest” was taken down
“due to ‘homophobia.’ ” The letter concluded that a nurse
complained to Jackert after the meeting about Kohl “basically
calling everyone ‘homophobic,’ ” but said he would not complain
to Human Resources “for fear of losing his job.” Jackert later
testified to the facts stated in her letter.
       A third letter, dated May 25, 2010, also anonymous,
basically repeated the allegations of the other two letters.
       The court instructed the jury that “these letters were
admitted for the limited purpose of proving notice to the




                                 11
defendants and you must not consider these three letters as proof
that the facts stated in them are true.”
       On August 19, 2016, the jury found against the hospital on
all causes of action, but found for MCA on all causes of action. It
found against MPHS on plaintiffs’ FEHA causes of action, and on
their common law cause of action for negligent supervision and
Alexander’s claim of retaliation, and found against plaintiffs on
their other claims against MPHS.
       The jury awarded damages totaling $4,734,973, comprising
awards for past economic damages through January 2016;
awards to Alexander and Hellmannsberger of $800,000 each in
past noneconomic damages; $250,000 each for injury to their
reputations; $250,000 to Alexander and $300,000 to
Hellmannsberger in future noneconomic damages; and a total of
$1.7 million in punitive damages. The court entered judgment
accordingly.
       C.    Motions for JNOV and New Trial
       After judgment was entered, the hospital, MPHS and
plaintiffs moved for judgment notwithstanding the verdict
(JNOV) and a new trial. Other than reducing Harris’s punitive
damages award, the trial court denied the motions.
       MPHS, the hospital, and plaintiffs timely appealed.
                            DISCUSSION
I.     MPHS’s Appeal
       MPHS contends the judgment against it must be reversed
with directions to enter judgment in its favor because plaintiffs
failed to exhaust their administrative remedies with respect to
their FEHA claims, and insufficient evidence supports the verdict
with respect to their negligent supervision claim.




                                12
       A.     Failure to Exhaust Administrative Remedies
       MPHS, which employed Kohl, argues it cannot be held
liable as a matter of law for plaintiffs’ FEHA claims because
plaintiffs failed to exhaust their administrative remedies, in that
they failed to mention MPHS in their administrative complaints.
We agree.
       FEHA makes it an unlawful employment practice for an
employer to harass or discriminate against an employee based on
the employee’s sexual orientation, to fail reasonably to
investigate a complaint of harassment or discrimination, or to
retaliate against an employee for making such a complaint.
(§ 12940, subds. (a), (h), (j) & (k).)
       “Any person claiming to be aggrieved by an alleged
unlawful practice may file with the [DFEH] a verified complaint,
in writing, that shall state the name and address of the . . .
employer . . . alleged to have committed the unlawful practice
complained of, and that shall set forth the particulars thereof and
contain other information as may be required by the
department.” (§ 12960, subd. (b), italics added.) The aggrieved
person has one year from the date of the alleged unlawful
practice to file such a complaint. (§ 12960, subd. (d).)
       Once the DFEH receives an aggrieved person’s complaint,
it must investigate the alleged unlawful practice and determine
whether it can resolve the matter “by conference, conciliation,
and persuasion.” (§ 12963.7, subd. (a).) If such measures fail, the
department may issue an accusation to be heard by the Fair
Employment and Housing Commission. (§§ 12903, 12963.7,
12965, subd. (a), 12969.) If that commission finds a violation, it
may issue a cease and desist order and grant other appropriate
relief. (§ 12970, subd. (a).) If the department issues no




                                13
accusation, it must give the aggrieved person notice and a right-
to-sue letter. (§ 12965, subd. (b).) The aggrieved person may,
within one year after receiving notice, bring a civil action against
the “person, employer, labor organization, or employment agency”
named in the charge. (§ 12965, subd. (b).)
        This administrative procedure presents a streamlined and
economical way to resolve employment practice disputes outside
civil litigation.
        The aggrieved person must exhaust this administrative
remedy before bringing a civil FEHA action. (Yurick v. Superior
Court (1989) 209 Cal.App.3d 1116, 1121.)
        We review de novo whether the doctrine of exhaustion of
administrative remedies applies in a given case. (Coastside
Fishing Club v. California Fish & Game Com. (2013) 215
Cal.App.4th 397, 414.)
        Here, plaintiffs mentioned MPHS nowhere in their FEHA
complaint, which constitutes a failure to exhaust their
administrative remedies against MPHS and precludes their
bringing a civil FEHA action against it. (Valdez v. City of Los
Angeles (1991) 231 Cal.App.3d 1043, 1061 (Valdez); Cole v.
Antelope Valley Union High School Dist. (1996) 47 Cal.App.4th
1505, 1511, 1515 (Cole) [“to bring a civil lawsuit under the FEHA,
the defendants must have been named in the caption or body of
the DFEH charge”].)
        Citing no pertinent authority, plaintiffs argue an equitable
exception to the rule that a FEHA defendant must have been
named in a DFEH complaint exists where the defendant received
actual notice of the complaint and an opportunity to participate
in the administrative process. They argue MPHS had actual
notice of their FEHA complaints because the DFEH served them




                                14
on MCA by way of Ana Marie Mesina, MCA’s director of human
resources, who also functions as the human resources director for
MPHS. We disagree.
       First, no California authority supports the exception.
Plaintiffs rely on Martin v. Fisher (1992) 11 Cal.App.4th 118, 122
and Saavedra v. Orange County Consolidated Transportation etc.
Agency (1992) 11 Cal.App.4th 824, 826-827, but in both of those
cases the offending individual was named in the body of a DFEH
complaint. Under Cole and Valdez, plaintiffs’ failure even to
mention MPHS in their DFEH complaint is fatal to their right to
bring a civil FEHA action against it.
       Second, even were we empowered and inclined to carve an
equitable exception out of mandatory statutory language where
an unnamed defendant receives actual notice of a FEHA
complaint, we would not do so here because the DFEH, for one,
had no notice that plaintiffs intended to accuse MPHS, and thus
had no opportunity to contact MPHS, investigate its involvement
in the alleged unlawful practice, or seek to resolve the matter by
conference, conciliation, and persuasion. Further, even though
MPHS may have known (by way of Mesina) that plaintiffs could
have named it in their administrative complaint, it was entitled
to rely on their failure to do so as evidence that they did not
intend to pursue a civil complaint against it, at least not until
they had filed new administrative complaints.
       Plaintiffs alternatively argue they satisfied the exhaustion
requirement because MPHS was neither known to them nor
reasonably discoverable within a year after their terminations.
(See Valdez, supra, 231 Cal.App.3d at p. 1061 [a FEHA claimant
need only name “known or reasonably obtainable defendants” in
a DFEH charge].) This is so, plaintiffs argue, because evidence at




                                15
trial revealed that MPHS employees mistakenly referred to
themselves as MCA employees; Kohl himself—as well as several
hospital employees, including plaintiffs and Susan Byrne, the
hospital’s Administrative Director of Professional Services—
believed he was an MCA employee; and Martin, the hospital’s
human resources director, mistakenly believed that MCA rather
than MPHS had contracted with the hospital to manage the
Behavioral Health Unit.
       But this merely demonstrates a widespread misconception
about the identity of Kohl’s employer; it fails to demonstrate
plaintiffs could not have cleared up the misconception—as
eventually it was cleared up—through reasonable efforts
exercised in a timely fashion, for example by obtaining the
management services contract from the hospital or Kohl’s
employment contract from MPHS. Plaintiffs argue MPHS and
MCA affirmatively marketed themselves to the public as a single
entity, but even if this were relevant, the sole evidence upon
which they rely for this proposition—a promotional poster
containing the initialism “MCA/MPHS”—moots the argument
because plaintiffs failed to name this entity in their
administrative complaint either.
       B.     Insufficient Evidence Supports the Negligent
       Supervision Verdict
       MPHS argues no substantial evidence supports their
liability for negligent supervision of Kohl because no evidence
suggested they were aware before plaintiffs were terminated that
Kohl had created a hostile work environment. We agree.
       A judgment supported by substantial evidence will be
upheld even if contrary evidence exists that might have caused
the jury to render a different verdict. (In re Dakota H. (2005) 132




                                16
Cal.App.4th 212, 228.) We “presume the judgment is correct,
indulge every intendment and presumption in favor of its
correctness, and start with the presumption that the record
contains evidence sufficient to support the judgment.” (Steele v.
Youthful Offender Parole Bd. (2008) 162 Cal.App.4th 1241, 1251.)
A judgment must be reversed “if it appears from the evidence,
viewed in the light most favorable to the party securing the
verdict, that there is no substantial evidence in support.”
(Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th
62, 68.)
       An employer can be held liable for negligent supervision if
it knows or has reason to believe the employee is unfit or fails to
use reasonable care to discover the employee’s unfitness. (Evan
F. v. Hughson United Methodist Church (1992) 8 Cal.App.4th
828, 843.) “[T]here can be no liability for negligent supervision
‘in the absence of knowledge by the principal that the agent or
servant was a person who could not be trusted to act properly
without being supervised.’ ” (Juarez v. Boy Scouts of America,
Inc. (2000) 81 Cal.App.4th 377, 395.)
       Here, Memorial Hospital received several complaints about
Kohl after plaintiffs were terminated, but there was no evidence
of any complaint communicated to MPHS during plaintiffs’
employment.
       Plaintiffs argue that Alexander complained about Kohl to
Adrian Taves, the hospital’s director of education, and to Martin,
the hospital’s human resources director, but no evidence
suggested that Taves or Martin communicated Alexander’s
complaint to MPHS.
       Plaintiffs argue MPHS’s ignorance was engineered, as a
nurse testified that a memo in the Behavioral Health Unit and




                                17
bearing the name of an MPHS director informed hospital
employees that they, in the words of the nurse, “could not go to
HR.” But no evidence indicated what exactly the memo said or
who posted it, or when or for how long. It is possible that the
memo instructed employees not to go to MPHS’s HR department
with complaints about nurses, which would have been more
appropriately addressed to the hospital’s HR department. In any
event, an employee’s vague, incomplete interpretation of a memo
that was never quoted, produced, or authenticated fails to
establish MPHS had imputed reason to believe Kohl was unfit.
      Plaintiffs argue that before trial MPHS successfully moved
in limine to exclude the testimony of former hospital employees
Florina Mondina and Bennie Green, who would have testified
they had complained about Kohl—and MPHS was on notice of
the complaints—before April 2009, when plaintiffs were
discharged. Plaintiffs argue the doctrine of invited error
precludes MPHS from now arguing that insufficient evidence
supported the verdict. We disagree.
      Plaintiffs represented to the trial court only that Mondina’s
testimony would show Kohl falsely accused employees of patient
abuse, Mondina complained to the hospital’s human resources
department, and the hospital took no action. They also
represented her testimony would impeach Kohl regarding the
extent of his disciplinary authority. Plaintiffs argued Green’s
testimony was relevant to rebut the defense’s showing that Kohl
had no discriminatory intent. Plaintiffs did not inform the court
that Mondina’s or Green’s testimony was relevant to show MPHS
knew about Kohl’s unfitness during the relevant period.
      The court found Mondina’s and Green’s testimony had only
limited relevance, and would result in the undue consumption of




                                18
time. Specifically as to Mondina, the court found her testimony
would result in a “trial within a trial: why Mr. Kohl took action
against her, who he talked with, all of the things he relied upon
in making his decision about her.”
       A trial court has broad discretion to exclude relevant
evidence on the ground it would consume too much time or result
in confusion. (Evid. Code, § 352.) To demonstrate the exclusion
was improper, the offering party must show that the “substance,
purpose, and relevance of the excluded evidence was made known
to the court . . . .” (Evid. Code, § 354, subd. (a); People v.
Rodrigues (1994) 8 Cal.4th 1060, 1176 [offer of proof must be
sufficiently specific so that trial court can rule knowledgeably on
the issue].)
       Assuming for the sake of argument that Mondina’s and
Green’s testimony would have established MPHS’s advance
knowledge of Kohl’s unfitness, there was no way for the trial
court to know that because plaintiffs did not proffer the evidence
for that purpose. Perhaps the court’s Evidence Code section 352
calculus would have led to a different ruling had plaintiffs
explained the additional relevance of the evidence. But because
they did not, they cannot now argue the trial court erred.
       C.    Conclusion
       MPHS was found liable only for FEHA violations and
negligent supervision. But plaintiffs’ failure to exhaust their
administrative remedies precludes their FEHA claims, and no
substantial evidence supports the verdict with respect to their
common law claim. Therefore, the judgment against MPHS must
be reversed and a new judgment entered in its favor.




                                19
II.    Plaintiffs’ Cross-Appeal
       The jury found MCA was not liable either directly or under
partnership or joint venture theories. After judgment was
entered, plaintiffs moved for a JNOV, seeking leave to amend the
complaint to conform to proof and allege MCA was MPHS’s alter
ego. Plaintiffs also sought leave to amend the judgment to add
MCA as a judgment debtor as MPHS’s alter ego.
       In their cross-appeal, plaintiffs contend MCA was liable as
MPHS’s alter ego, and the trial court erred in denying their
JNOV motion on this issue and their motion to amend the
complaint to conform to proof.
       Whether or not MCA was MPHS’s alter ego, our holding
that MPHS is not liable under either FEHA or the common law
moots all but one issue raised by the cross-appeal.
       “Alter ego” liability attends where “a plaintiff comes into
court claiming that an opposing party is using the corporate form
unjustly and in derogation of the plaintiff’s interests.” (Mesler v.
Bragg Mgmt. Co. (1985) 39 Cal.3d 290, 300.) Under the alter ego
doctrine, “[a] corporate identity may be disregarded—the
‘corporate veil’ pierced—where an abuse of the corporate privilege
justifies holding the [owner] of a corporation liable for the actions
of the corporation.” (Sonora Diamond Corp. v. Superior Court
(2000) 83 Cal.App.4th 523, 538.) “Two requirements must be met
to invoke the alter ego doctrine: (1) ‘[T]here must be such a unity
of interest and ownership between the corporation and its
equitable owner that the separate personalities of the corporation
and the shareholder do not in reality exist’; and (2) ‘there must be
an inequitable result if the acts in question are treated as those of
the corporation alone.’ ” (Turman v. Superior Court (2017) 17
Cal.App.5th 969, 980-981.)




                                 20
       To determine whether a sufficient unity of interest and
ownership exists between two entities, the court considers
commingling of assets, identical ownership, use of the same
offices and employees, disregard of corporate formalities,
identical directors and officers, “and use of one as a mere shell or
conduit for the affairs of the other.” (Troyk v. Farmers Group,
Inc. (2009) 171 Cal.App.4th 1305, 1342.) “Inadequate
capitalization of the original judgment debtor is another factor.”
(Highland Springs Conference & Training Center v. City of
Banning (2016) 244 Cal.App.4th 267, 281.)
       Plaintiffs adduce evidence that MCA and MPHS
commingled funds, had identical ownership, shared offices,
officers, and employees, and disregarded corporate formalities.
       Assuming this is true, however, none of it resulted in an
inequity because neither entity is liable to plaintiffs. MCA was
found not liable by a jury, and we hold, ante, that MPHS cannot
be liable either. The only possible inequity would be if MCA’s
concealed unity with MPHS caused plaintiffs to fail to name
MPHS in their administrative complaints.
       Plaintiffs argue this is indeed the case, because “MPHS and
MCA did their best to obfuscate their relationship with each
other and Kohl’s employer.” But as discussed above, the issue is
not whether the identity of MPHS as Kohl’s employer was
unknown to plaintiffs—due to artifice or otherwise—but whether
it was reasonably discoverable. Even if everything plaintiffs say
is true, they have failed to establish, and do not claim, that
MPHS’s identity as Kohl’s employer was unascertainable through
civil discovery.




                                21
       We conclude the trial court properly denied plaintiffs’
requests to amend the complaint or judgment to name MCA as
MPHS’s alter ego.
III. Community Hospital’s Appeal
       Plaintiffs sued Community Hospital for (1) sexual
harassment; (2) sexual orientation discrimination; (3) failure to
investigate and prevent harassment and discrimination; (4)
retaliation; (5) wrongful termination in violation of public policy;
(6) intentional infliction of emotional distress; (7) defamation;
and (8) negligent supervision.
       At the close of plaintiffs’ case the court granted nonsuit as
to Hellmannsberger’s and Harris’s causes of action for retaliation,
and as to Harris’s cause of action for intentional infliction of
emotional distress. Alexander and Hellmannsberger later
dismissed this latter cause of action as to themselves as well, and
the court granted a directed verdict as to Harris’s cause of action
for harassment.
       The causes of action that reached the jury were: (1) sexual
harassment (Alexander and Hellmannsberger only); (2) sexual
orientation discrimination; (3) failure to investigate and prevent
harassment and discrimination; (4) retaliation (Alexander only);
(5) wrongful termination in violation of public policy; (6)
defamation; and (7) negligent supervision.
       The jury found against Community Hospital on these
causes of action.
       The jury awarded damages to Alexander and
Hellmannsberger for past economic and non-economic loss, future
non-economic loss, and injury to reputation; and to Harris for
past economic loss. “Past” losses included those suffered up to
June 2016, the beginning of trial. After a second phase of the




                                22
trial, the jury awarded plaintiffs punitive damages against the
hospital, which the trial court later vacated on the ground that
the hospital was insolvent.
        A.    Evidence that Plaintiffs had “Cleared their
        Names” Was Inadmissible
        A year after Community Hospital terminated their
employment, plaintiffs were arrested and prosecuted for abusing
Hailey, but were ultimately acquitted.
        Before trial, the court granted motions in limine to exclude
all reference to these criminal proceedings.
        At trial, Alexander and Hellmannsberger testified, and
their counsel repeatedly argued, that their “names” were
ultimately “cleared.”
        Community Hospital contends the trial court erroneously
admitted evidence that the plaintiffs had cleared their names,
arguing the reference can only be to the criminal proceedings, in
violation of the court’s in limine rulings. We agree.
        “Except as otherwise provided by statute, all relevant
evidence is admissible.” (Evid. Code, § 351.) Relevant evidence is
that which tends in reason to prove or disprove a disputed fact of
consequence. (Evid. Code, § 210.) A trial court must limit the
introduction of evidence and argument to relevant and material
matters. (Evid. Code, § 1044.)
        FEHA makes it “an unlawful employment practice” to
discriminate against a person “in terms, conditions, or privileges
of employment” based upon sexual orientation. (§ 12940, subd.
(a).) Because direct evidence of an unlawful discrimination is
seldom available, courts use a system of shifting burdens to aid in
the presentation and resolution of such claims at trial. (Guz v.
Bechtel National, Inc. (2000) 24 Cal.4th 317, 354.) To establish a




                                23
prima facie case of discrimination under FEHA, the employee
must demonstrate that the employer had a discriminatory
motive. The employer may rebut the showing by producing
admissible evidence that it discharged the employee for a
legitimate nondiscriminatory reason. If it does so, the burden
shifts to the employee to produce substantial evidence that the
employer’s justification for its decision is either untrue or
pretextual or that the employer acted with discriminatory
animus. (Id. at pp. 355-356.)
       Here, whether there was reason to believe plaintiffs abused
Hailey, and concomitantly whether they were eventually cleared
of that charge, was directly relevant to the existence of a
nonretaliatory reason for their termination.
       However, “a judgment of acquittal in a criminal case is not
competent evidence in a subsequent civil action to prove the
innocence of the accused.” (Gibson v. Gibson (1971) 15
Cal.App.3d 943, 947-948.) Therefore, although a discrimination
plaintiff must be permitted to prove the pretextual nature of the
employer’s justification for terminating the plaintiff’s
employment, evidence that the plaintiff was acquitted of charges
raised by the employer is inadmissible for that purpose.
       We review a trial court’s rulings on the admissibility of
evidence for abuse of discretion. (City of Ripon v. Sweetin (2002)
100 Cal.App.4th 887, 900.) “A verdict or finding shall not be set
aside, nor shall the judgment or decision based thereon be
reversed, by reason of the erroneous admission of evidence
unless: [¶] (a) There appears of record an objection to or a motion
to exclude or to strike the evidence that was timely made and so
stated as to make clear the specific ground of the objection or
motion; and [¶] (b) . . . the error or errors complained of resulted




                                 24
in a miscarriage of justice.” (Evid. Code, § 353.) An evidentiary
error results in a miscarriage of justice when the reviewing court,
“ ‘after an examination of the entire cause, including the
evidence,’ is of the ‘opinion’ that it is reasonably probable that a
result more favorable to the appealing party would have been
reached in the absence of the error.” (People v. Watson (1956) 46
Cal.2d 818, 836.)
       At trial, Hellmannsberger testified he was suspended from
College Hospital when criminal charges were filed, and
terminated when he failed to provide documentation that he had
been “cleared of patient abuse charges.” He testified he
ultimately provided that documentation, but too late to be
reinstated, because “The minute order was not provided.” A
short time later, Hellmannsberger’s counsel published to the jury
a College Hospital document stating Hellmannsberger was
terminated “due to failure to provide court documentation.”
       Alexander similarly testified that College Hospital
suspended her after her arrest, and told her the suspension
would last “until she could provide proof or [sic] clearing my
name.” Alexander testified she eventually got documentation
“clearing” her name.
       In closing argument, plaintiffs’ counsel said that the
hospital had caused them to “get arrested,” which required that
“they had to clear their name. They had to go through
prosecution.”
       The multiple references to having been cleared can only
mean plaintiffs were acquitted of criminal charges. Plaintiffs
presented no evidence at trial, and do not claim on appeal, that
any agency “cleared” them. The closest they come is to argue
that their testimony “could just as easily refer to ‘clearing their




                                 25
names’ before the Nursing Board.” But there would have been no
way for the jury to make this connection, i.e., disassociate
plaintiffs’ exoneration from the immediately preceding—in both
testimony and argument—“arrest” and “prosecution,” and instead
attach it—with no evidence or direction—to some nursing board
proceeding.
      Admission of this evidence was therefore error.
      The prejudicial impact of the error is patent. Plaintiffs’
criminal proceedings were directly relevant to whether
Community Hospital terminated them on a pretext. For
example, evidence that the Department of Justice had conducted
its own independent investigation and found there was at least
probable cause to prosecute would have supported defendant’s
claim that plaintiffs were fired because they abused a patient.
Plaintiffs’ insinuation that criminal proceedings ended in their
favor could have been counterbalanced only by the equally
improper defense insinuation that criminal prosecutions do not
generally proceed absent the prosecuting agency’s independent
investigation and finding of probable cause. For the court to
permit plaintiffs to insinuate they had been “cleared” of criminal
charges, while at the same time muzzling any defense suggestion
that the charges were supported by probable cause, predestined
the result by leaving the jury no choice but to infer the
termination was pretextual.
      We are thus well satisfied that it is reasonably probable a
result more favorable to the hospital would have been reached in
the absence of the error.




                               26
       B.     Evidence Of Post-Termination Communications
       Was Inadmissible
       Community Hospital terminated plaintiffs’ employment in
April 2009.
       At trial, plaintiffs introduced evidence of: (1) An
anonymous May 2009 letter received by the hospital complaining
that Kohl had created a hostile work environment by favoring
male employees, particularly gay males, and openly discussing
his sex life in the workplace; (2) a May 2010 letter sent to the
hospital by Lisa Jackert, a hospital senior case manager,
complaining about Kohl’s conduct at a staff meeting, where he
accused the hospital of being homophobic, “outed” several
physicians and staff members as gay, made comments about their
appearance, and posted the cover of a gay magazine in the
nurses’ station showing a bare chested man; and (3) a May 2010
letter sent to the hospital by Patricia Tomlinson Sanchez, an RN,
complaining that Kohl had created a hostile work environment.
       The trial court admitted the evidence, and it was discussed
at length by several witnesses, including Jackert.
       The court gave two contradictory jury instructions
regarding the letters. During trial, the court instructed that a
“limited purpose” of the May 2010 correspondence was to show
that defendants had received a complaint about Kohl, but if
Jackert testified about the letter, the jury could consider it for the
truth of the matters asserted.
       Jackert did testify.
       At the conclusion of trial the court changed its position, and
admonished the jury that the letters “were admitted for the
limited purpose of proving notice to the defendants, . . . not . . . as
proof that the facts stated in them are true.”




                                  27
       The hospital contends the letters were inadmissible
hearsay, and their admission constituted prejudicial error. We
agree.
       “ ‘Hearsay evidence’ is evidence of a statement that was
made other than by a witness while testifying at the hearing and
that is offered to prove the truth of the matter stated.” (Evid.
Code, § 1200, subd. (a).) Hearsay evidence is inadmissible unless
an exception applies. (Id. at subd. (b).) An out-of-court
statement is not hearsay if offered to prove something other than
its truth, for example to explain an action the recipient took in
reliance upon it. (Rufo v. Simpson (2001) 86 Cal.App.4th 573,
591.)
       Here, plaintiffs’ theory was that Kohl created a hostile
work environment by giving preference to the male staff,
particularly other gay men, and by using offensive sexual
language, and the hospital created an environment where
employees were afraid to complain. One of the hospital’s claims
in rebuttal was that it had created no such environment, but on
the contrary maintained a zero tolerance policy regarding sexual
orientation discrimination and harassment and encouraged
employees to report any harassment.
       But the three letters were inadmissible on all of these
issues because they constituted out-of-court statements, and thus
could not be considered for the truth of anything stated in them.
They could not, for example, prove that Kohl created a hostile
work environment, that the hospital created an environment
where employees were afraid to complain, or that the hospital
failed to investigate a credible allegation of harassment. (That
an allegation was credible would have been one of the “truths”
that the hearsay was incompetent to establish.) Their only




                               28
proper purpose was to show the hospital had received a complaint
about Kohl’s unfitness as an employee. Assuming the hospital
did nothing about the complaint, the letters might have been
relevant to support plaintiffs’ cause of action for negligent
supervision, but only if they were sent before plaintiffs were
terminated. (See discussion, post.) They were not.
      Therefore, the court’s attempt to instruct the jury to
consider the letters only for the limited purpose of proving notice
(of some unspecified fact) failed to cure the error.
      Plaintiffs argue the three letters were admissible under
subdivision (b) of Evidence Code section 1101 to prove Kohl’s
discriminatory intent. The argument is without merit.
      Under Evidence Code section 1101, evidence of uncharged
offenses or misconduct is inadmissible to prove an actor’s
propensity to commit misconduct, but may be admitted if
relevant to prove a material fact such as the actor’s motive or
intent. (Evid. Code, § 1101 subds. (a) & (b); People v. Kelly (2007)
42 Cal.4th 763, 783.) Evidence of an uncharged offense is
relevant to prove motive or intent where similarities between the
uncharged offense and the charged offense support an inference
that the defendant harbored the same intent both times. (People
v. Ewoldt (1994) 7 Cal.4th 380, 403.) For example, evidence of
workplace misconduct of the same nature as that of which a
plaintiff complains is admissible because it is probative of the
employer’s motive for discrimination and informs whether an
employer’s proffered reason for an adverse employment action is
pretext. (Meeks v. Autozone, Inc. (2018) 24 Cal.App.5th 855, 871-
873 [evidence of sexual harassment against other employees];
McCoy v. Pacific Maritime Assn. (2013) 216 Cal.App.4th 283, 296-
298 [evidence of retaliation against other employees].)




                                29
       But an out-of-court statement concerning an uncharged
offense is inadmissible to prove the truth of the matter stated.
       Here, the only permissible purpose of the letters was to
prove that the hospital was put on notice of Kohl’s unfitness.
They were admitted and considered by the jury only for that
purpose, and were inadmissible to prove Kohl’s motive or intent.
       The question remains whether it is reasonably probable a
different result would have been reached without admission of
the three letters. We conclude it is.
       Plaintiffs focused on the letters extensively at trial. They
questioned Sarkis Arevian, MPHS’s vice president, about the
2009 and May 2010 letters, and whether Kohl had outed
physicians. Jackert herself testified about the contents of her
May 2010 letter. Ana Marie Mesina, the HR Manager for MPHS,
was examined at length concerning anonymous letter in which
Kohl was alleged to have accused the hospital of being
homophobic. Valerie Martin was asked about statements in the
May 2010 letter. Kohl testified about matters raised only in the
May 2010 letter. Michelle Boswell, a former RN at the hospital,
was asked whether she would have found it disturbing had Kohl
outed people at a meeting in 2010. And Patricia Tomlinson
Sanchez testified about writing an anonymous handwritten letter
to MCA containing the statements made in the anonymous
typewritten May 2009 letter.
       Other than the letters, plaintiffs’ evidence consisted of the
testimony of several witnesses that Kohl had created a hostile
work environment; and the hospital’s evidence consisted of the
testimony of several witnesses that he had not. Although the
trial court itself said some of the defense witnesses were not
credible, we think it at least reasonably probable that plaintiffs’




                                 30
repeated reliance on the three inadmissible letters had its
intended effect of swaying the jury.
       C.     Insufficient Evidence Supported
       Hellmannsberger’s FEHA and Wrongful Termination
       Claims
       The hospital contends no substantial evidence supports
Hellmannsberger’s FEHA or wrongful termination claims
because no evidence suggested that he, a heterosexual male, was
targeted by Kohl. We agree.
       To prevail on a claim of harassment so severe or pervasive
as to create a hostile work environment, an employee “must
demonstrate that the conduct complained of was severe enough or
sufficiently pervasive to alter the conditions of employment and
create a work environment that qualifies as hostile or abusive to
employees because of their sex. [Citations.] . . . [A] workplace
may give rise to liability when it ‘is permeated with
“discriminatory [sex-based] intimidation, ridicule, and insult,”
[citation], that is “sufficiently severe or pervasive to alter the
conditions of the victim’s employment and create an abusive
working environment.” ’ ” (Lyle v. Warner Brothers Television
Productions (2006) 38 Cal.4th 264, 278-279 (Lyle).)
       An employee’s work environment is affected not only by
conduct directed at the employee but also by the treatment of
others. (Beyda v. City of Los Angeles (1998) 65 Cal.App.4th 511,
519.) To establish a hostile work environment caused by the
treatment of others, the plaintiff generally must show that the
harassment directed at others was in his immediate work
environment, and that he personally witnessed it. (Lyle, supra,
38 Cal.4th at p. 285; see Miller v. Dept. of Corrections (2005) 36
Cal.4th 446, 466 [an employee may “establish an actionable claim




                                31
of sexual harassment under the FEHA by demonstrating that
widespread sexual favoritism was severe or pervasive enough to
alter his or her working conditions and create a hostile work
environment”].)
       Here, Hellmannsberger testified he: (1) Observed Kohl on
a number of occasions reassign women from the preferred “A”
unit in the Behavioral Health Wing to the “B” unit to
accommodate two male friends—“some gay, some not”—who
wanted to work in the A unit; (2) heard Kohl state on one
occasion that he was “upset” with two of the Filipino nurses, and
“tired of the Filipino mafia”; and (3) observed Kohl “frequently”
spend time with Anthony Pace, who was unqualified to perform
his work tasks.
       (Hellmannsberger argues he also testified on another
occasion that Kohl used his position to promote other gay male
staff. However, that testimony occurred at deposition, not trial.
At trial, plaintiffs’ counsel read from Hellmannsberger’s
deposition, in which he had said, “I believe [Kohl] showed
favoritism towards [gay men] just on his demeanor.” Counsel
then asked, “That was your deposition under oath in March of
2014?” To which Hellmannsberger replied, “Yes, Ma’am.”)
       “Minor or relatively trivial adverse actions or conduct . . .
cannot properly be viewed as materially affecting the terms,
conditions, or privileges of employment and are not actionable”
under FEHA. (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th
1028, 1054.) “Requiring an employee to prove a substantial
adverse job effect ‘guards against both “judicial
micromanagement of business practices,” [citation] and frivolous
suits over insignificant slights.’ ” (Akers v. County of San Diego
(2002) 95 Cal.App.4th 1441, 1455.) “ ‘[W]ork places are rarely




                                 32
idyllic retreats, and the mere fact that an employee is displeased
by an employer’s act or omission does not elevate that act or
omission to the level of a materially adverse employment action.’
[Citation.] If every minor change in working conditions or trivial
action were a materially adverse action then any ‘action that an
irritable, chip-on-the-shoulder employee did not like would form
the basis of a discrimination suit.’ ” (Thomas v. Department of
Corrections (2000) 77 Cal.App.4th 507, 511.)
       One instance of referring to Filipina nurses outside their
hearing as “mafia,” another of hiring and spending time with an
unqualified male employee (who was not identified in the record
as homosexual), and an indeterminate number of instances
where female employees were replaced by male employees—
“some gay, some not”—in choice assignments, fails as a matter of
law to establish widespread sexual favoritism so severe or
pervasive as to alter Hellmannsberger’s working conditions or
create a hostile work environment.
       D.     Insufficient Evidence Supported Plaintiffs’
       Defamation Claims
       The hospital contends the jury’s verdict on plaintiffs’
defamation claims was unsupported by substantial evidence. We
agree.
       “The tort of defamation ‘involves (a) a publication that is (b)
false, (c) defamatory, and (d) unprivileged, and that (e) has a
natural tendency to injure or that causes special damage.’ ”
(Taus v. Loftus (2007) 40 Cal.4th 683, 720.) To be vicariously
liable for the publication of another under the doctrine of
respondeat superior, the employee or agent must have been
“acting in the scope of his authority and in furtherance of the




                                 33
employer’s business.” (Sanborn v. Chronicle Publishing Co.
(1976) 18 Cal.3d 406, 411.)
       Here, Lectricia Smith testified that on one occasion in 2009
or 2010 she overheard Kohl tell a person working in the
psychiatric unit that plaintiffs had been fired because they
committed patient abuse and were going to jail. Smith could not
identify the person to whom Kohl spoke, and did not know what
had preceded the statement or what else Kohl was doing at the
time.
       There was no evidence at all that the hospital authorized
Kohl to make the statement or that he was speaking within the
scope of his duties and in furtherance of the hospital’s interests.
Lacking such evidence, a single instance of gossip by Kohl at
work cannot be imputed to the hospital, and thus fails to
establish plaintiffs’ defamation claims.
       E.     Insufficient Evidence Supported any
       Employee’s Negligent Supervision Claim
       The hospital contends no substantial evidence supported its
liability to Alexander and Harris for negligent supervision of
Kohl because no evidence suggested it was aware before Kohl
committed misconduct that he had a propensity to do so. We
agree.
       “[A]n employer can be liable to a third person for
negligently hiring, supervising, or retaining an unfit employee.
[Citation.] Liability is based upon the facts that the employer
knew or should have known that hiring the employee created a
particular risk or hazard and that particular harm materializes.”
(Doe v. Capital Cities (1996) 50 Cal.App.4th 1038, 1054.) “To
establish negligent supervision, a plaintiff must show that a
person in a supervisorial position over the actor had prior




                                34
knowledge of the actor’s propensity to do the bad act.” (Z.V. v.
County of Riverside (2015) 238 Cal.App.4th 889, 902, italics
added.)
      Here, plaintiffs alleged that Kohl “had a history of sexual
harassment and creating a hostile work environment at other
jobs before he worked for defendants[,] and if defendants had
conducted a thorough background check they would have
discovered this and[,] not hired Kohl or given him the authority
over the plaintiffs that they did. [¶] After Kohl began working
for defendants, he began sexually harassing employees, creating
a hostile work environment, favored homosexual employees and
male employees over female employees and actively pursued
anyone who stood up to him so that they would be terminated
from their employment. [¶] After Kohl began working for
defendants, they knew or should have know[n] of his illegal
improper behavior[,] . . . and ratified that conduct by failing to
take any action against Kohl . . . .” (Capitalization standardized.)
      But no evidence suggested the hospital was put on prior
notice of any misconduct by Kohl. Plaintiffs presented evidence
that Alexander complained four or five times to Adrian Taves, the
hospital’s director of education, that Kohl was “flamboyantly
gay,” but gay mannerisms caused Alexander no injury.
      Plaintiffs also presented evidence that a few weeks before
she was terminated, Alexander complained to Taves that Kohl
had berated her in his office, and when she took the same
complaint to the human resources director, her employment was
implicitly threatened. These reports may have put the hospital
on constructive notice that Kohl had created a hostile work
environment, but not prior constructive notice, as no evidence
suggested he did anything after the reports that injured




                                35
Alexander. The only event described by any witness as occurring
after the reports was Alexander’s termination.
       Plaintiffs ague the memo discussed above with respect to
MPHS put the hospital on constructive notice of the hostile work
environment created by Kohl. But as discussed, an employee’s
vague, incomplete interpretation of a memo that was not
produced or authenticated fails to establish the hospital had
imputed reason to believe Kohl was unfit.
       Plaintiffs argue the hospital is estopped under the doctrine
of invited error from challenging the sufficiency of the evidence of
negligent supervision because it obtained an in limine order
excluding evidence that two employees had complained to the
hospital about Kohl in 2008 and March 2009. We disagree.
       The doctrine of invited error “prevent[s] a party from
misleading the trial court and then profiting therefrom in the
appellate court.” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383,
403.)
       Here, the hospital did not mislead the trial court into
erroneously excluding evidence of prior complaints—the court
made no such order. In ruling on the hospital’s motion the court
granted the motion in part, and ruled that “[i]f Plaintiffs seek to
introduce evidence of any conduct directed at other employees
and which was not witnessed by Plaintiffs, a specific offer of proof
must be made in advance.” Plaintiffs made no such offer of proof.
       F.    Damages
       At the close of plaintiffs’ case-in-chief, the hospital moved
for partial nonsuit on the ground that plaintiffs’ claimed damages
should be cut off when they were arrested by the State of
California. The trial court denied the motion on the ground that
an issue of damages is not a proper subject for a nonsuit motion.




                                 36
(The court’s rationale was clearly erroneous, as a nonsuit motion
may be made as to “some . . . of the issues involved in the action”
(Code Civ. Proc., § 581c, subd. (b), including an issue of damages
(Hoch v. Allied-Signal, Inc. (1994) 24 Cal.App.4th 48, 58-59).)
       After trial, the hospital moved for a JNOV with respect to
plaintiffs’ damages suffered after their arrest and prosecution.
This motion, too, was denied.
       The hospital contends the jury improperly awarded
plaintiffs economic and non-economic damages they suffered after
having been fired by College Hospital, and the trial court
improperly denied their nonsuit and JNOV motions asserting
this fact. We agree.
       A wrongfully discharged employee’s actual economic
damage “is the amount of money he [or she] was out of pocket by
reason of the wrongful discharge.” (Stanchfield v. Hamer Toyota,
Inc. (1995) 37 Cal.App.4th 1495, 1502-1503 (Stanchfield).) In
other words, a “causal link” must exist “between the adverse
action and the damage.” (Mamou v. Trendwest Resorts,
Inc. (2008) 165 Cal.App.4th 686, 713.) “The general rule is that
the measure of recovery . . . is the amount of salary . . . for the
period of service, less the amount which the employer
affirmatively proves the employee has earned or with reasonable
effort might have earned from other employment. . . . [T]he
employer must show that the other employment was comparable,
or substantially similar, to that of which the employee has been
deprived; the employee’s rejection of or failure to seek other
available employment of a different or inferior kind may not be
resorted to in order to mitigate damages.” (Parker v. Twentieth
Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181-182, italics
omitted.)




                                37
      Here, damages plaintiffs suffered after being fired by
College Hospital were caused by the state’s decision to prosecute
them, not by their wrongful discharge from Community Hospital.
Any contribution by Community Hospital to this decision was
absolutely privileged. (Civ. Code, § 47, subd. (b).)
      Plaintiffs rely on Stanchfield for the proposition that
although damages suffered by a wrongfully discharged employee
may abate once he or she finds subsequent employment, they will
resume if the employee loses that second job without fault. They
argue the damages they suffered after their discharge from
College Hospital were properly awarded because the termination
was beyond their control. We disagree.
      In Stanchfield, the plaintiff’s employer breached an
employment agreement when it terminated his employment. He
found another job within days, but two months later was fired
from that job for “good cause” (deceit and absenteeism).
(Stanchfield, supra, 37 Cal.App.4th at pp. 1500, 1503.)
      The court held the plaintiff was obligated to mitigate his
damages from wrongfully losing the first job, by seeking and
retaining subsequent employment. His misconduct in the second
job constituted a failure to mitigate damages. The court implied
without deciding that the plaintiff could have been seen to have
mitigated his damages had the second termination been beyond
his control. (Stanchfield, supra, 37 Cal.App.4th at p. 1501.)
      Stanchfield is inapposite. Once plaintiffs obtained and
retained (for a year) comparable subsequent employment at
College Hospital, their damages from their termination from
Community Hospital ceased. Their discharge from College
Hospital was caused by the state’s prosecution for patient abuse,
not by College Hospital.




                               38
       G.     Cumulative Error
       Even no one error was itself prejudicial, we conclude that
multiple errors combined to cause an unfair trial.
       A “series of trial errors, though independently harmless,
may in some circumstances rise by accretion to the level of
reversible and prejudicial error.” (People v. Hill (1998) 17 Cal.4th
800, 844; see Johnson v. Tosco Corp. (1991) 1 Cal.App.4th 123,
140.) However, “[l]engthy . . . trials are rarely perfect, and this
court will not reverse a judgment absent a clear showing of a
miscarriage of justice.” (Hill, at p. 844; see Bruton v. United
States (1968) 391 U.S. 123, 135 [“ ‘A defendant is entitled to a fair
trial but not a perfect one’ ”].)
       Here, evidence that plaintiffs had cleared their names,
presented in a context that could only mean they had been
acquitted of criminal charges, informed the jury that the
hospital’s reason for terminating plaintiffs was pretextual.
       Evidence that the hospital received three letters making
the same allegations made by plaintiffs provided undue support
for plaintiffs’ allegations.
       Evidence that Hellmannsberger witnessed several trivial,
isolated acts by Kohl directed at others incorrectly implied that
such conduct creates a work environment hostile to third parties.
       Fragmentary evidence of a memo that was neither
produced nor authenticated indicated to the jury that
insubstantial evidence may support a claim, as did evidence of an
isolated, overheard statement made to an unknown person for an
unknown purpose; or post-facto complaints used to ascribe prior
notice of an employee’s unfitness.
       And evidence of damages incurred long after the adverse
effects of a wrongful termination had ceased informed the jury




                                 39
that once an employer wrongfully fires an employee, it basically
becomes the employee’s unemployment insurer indefinitely, no
matter how many jobs the employee subsequently obtains and
loses.
       Each of these signals was improper. Evidence that the
plaintiffs had somehow cleared their names in criminal
proceedings, or that the hospital had received post-termination
complaints about Kohl, was inadmissible for the purposes for
which the jury must ultimately have considered it. Evidence of
isolated or trivial events or post-facto complaints or a fragment of
a memo or overheard conversation was insufficient as a matter of
law to support the uses the jury made of it. And of course a
causal link must exist between a wrongful termination and
damages suffered.
       The message conveyed to the jury by the errors was clear:
the hospital was liable. This was unfair. Given the numerosity
of the errors, and their quality, we conclude it is reasonably
probable the jury would have reached a different result without
them.




                                 40
                            DISPOSITION
       The judgment is affirmed as to MCA and reversed as to
MPHS and Community Hospital. The trial court is directed to
enter judgment in favor of MPHS entirely and in favor of the
hospital on all of Hellmannsberger’s claims and Alexander’s and
Harris’s claims for defamation and negligent supervision. The
trial court is directed to order a new trial as to Alexander’s and/or
Harris’s claims for sexual harassment, sexual orientation
discrimination, failure to investigate and prevent harassment
and discrimination, retaliation, and wrongful termination in
violation of public policy. Each side is to bear its own costs on
appeal.




                                                  CHANEY, J.

We concur:




             ROTHSCHILD, P. J.




                            *
             WEINGART, J.

      *
       Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.




                                 41
Filed 3/10/20
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                         DIVISION ONE

JUDY ALEXANDER et al.,                       B279155, B280916

       Plaintiffs and Respondents,           (Los Angeles County
                                             Super. Ct. No. BC426353)
       v.
                                            ORDER CERTIFYING
COMMUNITY HOSPITAL OF LONG                  OPINION FOR
BEACH et al.,                               PUBLICATION

       Defendants and Appellants.


THE COURT:
      The opinion filed in the above-entitled matter on February
13, 2020, was not certified for publication in the Official Reports.
Pursuant to California Rules of Court, rule 8.1105(c), this opinion
is now ordered published in the Official Reports.



____________________________________________________________
                                                                 *
ROTHSCHILD, P. J.              CHANEY, J.        WEINGART, J.

*
 Judge of the Los Angeles Superior Court, assigned by the Chief
Justice pursuant to article VI, section 6 of the California
Constitution.
