Filed 10/25/17 Dept. of Fair Employment and Housing v. Fortune Players Group CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE


DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING,
Plaintiff and Respondent,
v.
FORTUNE PLAYERS GROUP, INC.,
Defendant and Appellant,
MARIA ESCUETA,
Real Party In Interest.


A148624

(San Mateo County
Super. Ct. No. CIV-529332)

The Department of Fair Employment and Housing (DFEH) brought an employment discrimination suit, on behalf of itself and Maria Escueta, against Escueta’s employer, Fortune Players Group, Inc. (FPG). (Gov. Code, § 12965.) The jury found FPG discriminated against Escueta on the basis of her gender, race and national origin, in violation of the California Fair Employment and Housing Act (id., § 12900 et seq.). Escueta was awarded economic and noneconomic damages. FPG appeals from the judgment, arguing the trial court abused its discretion in a pretrial evidentiary ruling and in denying FPG’s motion for new trial. FPG also maintains substantial evidence does not support the jury’s economic damages award. We disagree and affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
FPG is a third-party company that staffs Lucky Chances Casino (Lucky Chances) in Colma with proposition players. Proposition players serve as “bankers” for gaming tables and play the games using chips provided by their employer. Unlike Las Vegas casinos where patrons play against the house, California cardrooms are required to contract with a third-party company, such as FPG, to serve as the “bank” and to pay out when patrons win. The third party’s proposition players also play against the patrons in the cardroom. FPG is owned by Tricia Castellanos, Remil Medina, and Phyllis Cuison.
FPG employs four levels of proposition players. Level Four players are considered entry level and play blackjack and three-card poker. Level Three players play Ultimate Texas Hold‘em and the Level Four games. Proposition players in Level Two positions play doublehand, as well as Level Three and Four games. Level One is the highest level. Level One players play pai gow tiles, as well as Level Two, Three, and Four games.
In July 2010, FPG hired Escueta, a Filipino woman, to work as a Level Four proposition player. She was paid $12 per hour. Escueta communicated her interest in and qualifications for a Level Two position on numerous occasions throughout her employment. In 2010, Escueta told FPG’s operations manager, Danny Wong, she was interested in playing doublehand—a Level Two position. Wong told her there were no openings. Shortly thereafter, on September 15, 2010, a Chinese male was hired for a Level Two position.
In 2011, Escueta was promoted to a Level Three position and received a $2.00 increase in her hourly wage. Also in 2011, without Escueta being given any opportunity to apply, two more Chinese males, a Chinese female, and a Filipino male were hired or promoted to Level Two positions. In 2012, Escueta spoke to FPG’s office manager, Angie De Los Reyes, about openings and was told there was a hiring freeze for positions at Levels One and Two. Soon after this conversation, and without affording Escueta the chance to apply, a Chinese male was promoted to a Level Two position.
Around April 2013, Escueta again requested a promotion to Level Two. In May 2013, after a Level Two player was promoted to a Level One position, a Chinese male was promoted to the vacant Level Two position. Again, no one notified Escueta of the opening or allowed her to apply. In August 2013, Escueta addressed a letter to De Los Reyes and Wong, in which she again sought (unsuccessfully) to audition for a Level Two position.
In July 2014, DFEH sued FPG, on behalf of itself and Escueta, for employment discrimination on the basis of sex, race, and national origin (Gov. Code, § 12940, subd. (a)) and for failure to prevent discrimination (id., § 12940, subd. (k)). DFEH filed a first amended complaint on July 30, 2014, which alleged the same causes of action. At the time the amended complaint was filed and through trial, Escueta continued to work for FPG as a Level Three proposition player. The amended complaint alleged FPG discriminated against Escueta because of her gender (female), race and national origin (Filipino) when, despite communicating her qualifications and interest in a Level Two position, FPG failed to promote her. DFEH alleged that FPG preferred to hire or promote Chinese and/or male individuals to play its higher-level games (Levels One and Two).
During discovery, Daniel Chan, a former FPG employee and Escueta’s husband, was deposed. Chan testified René Medina, the former owner of Lucky Chances, said, “he doesn’t trust non-Chinese people at [pai gow] tiles,” a Level One game. Thereafter, René’s role at FPG and his discriminatory statements were the subject of ongoing discovery and motion practice. FPG insisted René played no role. In fact, during their depositions, both De Los Reyes and René explicitly denied René’s involvement in FPG’s business operations.
A jury trial was scheduled to begin on October 13, 2015. To support its contention that René played a controlling role in FPG’s hiring and promotion decisions, DFEH intended to call Agent Yolanda Sanchez, of the Department of Justice’s Bureau of Gambling Control (Bureau), to testify regarding her observations of René during a previous inspection at Lucky Chances. On October 6, 2015, DFEH subpoenaed Sanchez to testify and, on October 13, disclosed her as a trial witness.
On October 15, 2015, the Bureau conducted an administrative inspection of FPG’s offices as part of its separate ongoing investigation into René s involvement in Lucky Chances’s business affairs. During the October 15 inspection, Sanchez interviewed De Los Reyes, who showed Sanchez documents supporting DFEH’s contention that René had controlling involvement in FPG’s day-to-day business operations. De Los Reyes specifically said René made final employment decisions at FPG and showed Sanchez various documents supporting that conclusion. Especially pertinent was a June 17, 2015 text message De Los Reyes received from René, which stated, “[M]aria [Escueta] dont [sic] give” a raise. Sanchez notified DFEH of the Bureau’s findings.
When a courtroom became available on October 19, 2015, FPG responded to the inspection by filing a supplemental brief in support of its motion in limine. The motion in limine sought to exclude Chan’s testimony regarding René’s out-of-court statements on the grounds they were hearsay because René was not an FPG employee or agent. In its supplemental brief, FPG argued for the exclusion of all evidence obtained during the October 15 inspection on the grounds of unfair surprise. FPG also argued the inspection was unlawful because the Bureau did not have a warrant.
DFEH opposed FPG’s motion and submitted a declaration from Sanchez describing her interview of De Los Reyes. Sanchez stated De Los Reyes identified René as the final decision maker on hiring, firing, promotions, and pay raises at FPG. De Los Reyes also showed Sanchez text messages, on her cell phone, to and from René concerning “specific operational tasks performed or to be performed at the [FPG] office.” Sanchez also found three work planners, in which De Los Reyes acknowledged writing various notes, such as “Mr. M called” and “Mr. M approved hiring.” Finally, Sanchez stated the inspection was conducted in furtherance of the Bureau’s own ongoing investigation of René, was not motivated by DFEH’s suit, and made clear that, at the time the declaration was signed (Oct. 20, 2015), the Bureau had not provided DFEH with any of the evidence obtained during the inspection.
FPG asked for an opportunity to review the evidence obtained by Sanchez before the trial court ruled on its admissibility, but it never sought a continuance or to reopen discovery. DFEH shared the newly discovered evidence with FPG and the court as soon as it was received from the Bureau, on October 20 and 21, 2015.
After argument on FPG’s motion in limine, the trial court denied the motion and ruled De Los Reyes’s out-of-court statements obtained during the inspection were admissible under the party admission exception to the hearsay rule (Evid. Code, § 1220). Based on evidence obtained during the inspection, the court made a preliminary finding that René was an authorized agent of FPG, and as such, ruled his out-of-court statements to Chan were admissible. (See id., § 1222 [“[e]vidence of a statement offered against a party is not made inadmissible by the hearsay rule if: [¶] (a) The statement was made by a person authorized by the party to make a statement or statements for him concerning the subject matter of the statement; and [¶] (b) The evidence is offered either after admission of evidence sufficient to sustain finding of such authority”].)
During the subsequent six-day trial, DFEH presented evidence obtained during the October 15, 2015 inspection. Chan also testified he once asked René “if there is any possibility that [Escueta] can go to either doublehand or tiles[?]” In response, “[René] basically said he didn’t trust non-Chinese people at tiles.”
The jury found FPG discriminated against Escueta because of her sex, race, and national origin by failing to consider promoting her, and that FPG failed to take all reasonable steps to prevent discrimination. The jury awarded Escueta $16,977 in lost wages and $17,500 in noneconomic damages. On April 14, 2016, the trial court entered a judgment of $34,477, plus interest, against FPG and ordered injunctive relief.
After judgment was entered, FPG filed a motion for new trial, arguing the October 15, 2015 inspection resulted in unfair surprise and violated its constitutional rights. (Code Civ. Proc., § 657, subd. (3).) DFEH opposed the motion for new trial, which was denied by operation of law. (Id., § 660.) FPG filed a timely notice of appeal.
II. DISCUSSION
FPG contends: (1) the trial court abused its discretion by admitting the evidence obtained on October 15, 2015, and by denying FPG’s motion for new trial; and (2) substantial evidence does not support the jury’s economic damages award. Neither argument has merit.
A. Denial of Motion for New Trial
FPG’s challenge to the evidence obtained by the Bureau is less than clear. FPG states it does not seek to have this court “conclusively preclud[e]” admission of the newly obtained evidence. Instead, it seeks a remand for new trial “so that FPG may have a full and fair opportunity to address the . . . ‘evidence’ seized in the [Bureau] raid, including a full and fair opportunity to argue for its exclusion” or, in the alternative, “a full and fair opportunity to prepare a defense.” This suggests FPG is challenging only the trial court’s denial of its motion for new trial. On the other hand, FPG also relies on case authority discussing exclusion of evidence as a remedy for willful withholding of that evidence during discovery. (See, e.g., Deeter v. Angus (1986) 179 Cal.App.3d 241, 254–255.) Although the arguments are not clearly delineated, we address each in turn.
A motion for new trial may be granted on the ground of “[a]ccident or surprise, which ordinary prudence could not have guarded against.” (Code Civ. Proc., § 657, subd. (3).) “ ‘ “The determination of a motion for a new trial rests so completely within the court’s discretion that its action will not be disturbed unless a manifest and unmistakable abuse of discretion clearly appears.” ’ ” (Hata v. Los Angeles County Harbor/UCLA Medical Center (1995) 31 Cal.App.4th 1791, 1800.) “ ‘ “Surprise” as a ground for a new trial denotes some condition or a situation in which a party to an action is unexpectedly placed to his detriment. The condition or situation must have been such that ordinary prudence on the part of the person claiming surprise could not have guarded against and prevented it. Such party must not have been negligent in the circumstances.’ ” (Id. at p. 1806; Wade v. De Bernardi (1970) 4 Cal.App.3d 967, 971.)
FPG’s surprise argument fails because it could have discovered the disputed evidence long before trial if it had exercised reasonable diligence. FPG fails to explain why it could not interview its own office manager, De Los Reyes, or obtain the documentary evidence, which was found at FPG’s offices. FPG cites no evidence to support its position the documents were outside its possession or control because they were on De Los Reyes’s “personal” cell phone and “personal work planner.” As FPG has not shown that “ ‘ordinary prudence on [its part] could not have guarded against and prevented’ ” the surprise, the trial court did not abuse its discretion in denying a new trial on this ground. (Hata v. Los Angeles County Harbor/UCLA Medical Center, supra, 31 Cal.App.4th at p. 1806.)
FPG’s constitutional basis for new trial is similarly without merit. We need not resolve DFEH’s forfeiture argument because, even if we assume the issue was preserved, FPG has still not shown—two years after the inspection—that the Bureau’s search was unconstitutional. An exception to the warrant requirement exists for administrative inspections of closely regulated industries. (New York v. Burger (1987) 482 U.S. 691, 693, 702, 712; People v. Potter (2005) 128 Cal.App.4th 611, 618.) “Under the closely-regulated-industry exception, the owner of a heavily regulated business is deemed to be on notice that his business premises will be subject to periodic warrantless administrative searches by government agents pursuant to a statutory inspection scheme.” (Potter, at p. 618.) Here, the inspection was conducted pursuant to the Bureau’s authority under Business and Professions Code section 19827, subdivision (a)(1)(D), which authorizes the Bureau, “without notice or warrant,” to “[s]ummarily seize, remove, and impound any equipment, supplies, documents, or records from any licensed premises for the purpose of examination and inspection.”
Turning to the trial court’s evidentiary ruling, FPG invokes the trial court’s “inherent authority to preclude evidence to police an abuse of the litigation process” (Peat, Marwick, Mitchell & Co. v. Superior Court (1988) 200 Cal.App.3d 272, 286), and argues the trial court erred in failing to exercise that authority in this case. Our discovery laws “were designed to prevent trial by ambush” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 781), but FPG presents no evidence that ambush is what occurred. FPG concedes DFEH itself did not obtain the October 15, 2015 evidence until after the close of discovery and, therefore, did not willfully withhold it. FPG contends this “is immaterial” and that, “[e]ven in the absence of a willful failure to provide discovery, a trial court should preclude the introduction of undisclosed evidence at trial.” However, we fail to see how DFEH could be faulted for failing to disclose, during discovery, evidence that was not in its possession and which it did not know existed. Nor do we see, in these circumstances, any other compelling reason to suppress such highly relevant evidence. None of the authority FPG cites is on point.
The court in Crumpton v. Dickstein (1978) 82 Cal.App.3d 166 (Crumpton), held it was error to admit the testimony of two defense expert witnesses who were not disclosed to the plaintiff in discovery nor in response to a motion to compel granted only one month before trial. The trial court erred by concluding the determining factor in whether to preclude the testimony of the two experts was whether the omission was willful. (Id. at pp. 170–172.) The Crumpton court explained: “By [the] defendant’s inclusion then of [one] additional name [but not the other two doctors’ names, the] plaintiff was no doubt lulled into a false sense of security. In denying the at-trial motion to exclude the testimony of these [two additional] witnesses simply because the omission of their names was not willful, the trial court effectively thwarted a legitimate purpose of the discovery statute by impeding plaintiff’s preparation for trial.” (Id. at p. 172.)
FPG also relies on Castaline v. City of Los Angeles (1975) 47 Cal.App.3d 580 (Castaline), which involved a personal injury action against the city arising from an automobile collision caused by a street sweeper. (Id. at p. 583.) The trial court excluded the testimony of a doctor who had examined a personal injury plaintiff three days before trial. (Id. at p. 591.) In seeking to exclude the evidence, the objecting party pointed out the plaintiff had previously stated, in response to an interrogatory, that she was “fully recovered from any injuries” received in the underlying accident. (Id. at pp. 591–592.) In reliance on that response, the defendant cancelled a physical exam of the plaintiff by a defense physician. The plaintiff appealed, but the reviewing court found no error. The exclusion of the physician’s testimony was within the court’s power to insure a fair trial. (Ibid.) The reviewing court explained: “While we doubt that California Rules of Court, [former] rule 222, prohibits parties from generating evidence—as distinguished from initiating discovery—within 30 days of trial, the defense point that [it] would be unfairly surprised by the witness had merit. The [defendant] never produced any medical testimony and its counsel’s statement that after receiving answers to interrogatories . . . , he cancelled a medical examination on behalf of the [defendant] stood unchallenged. Under all of these circumstances we cannot say that the court’s exclusion of [the doctor’s] testimony was not within its basic power to insure that all parties receive a fair trial.” (Castaline, at p. 592.)
Neither case advances FPG’s argument that the trial court abused its discretion. First, in this case, we are not dealing with disclosure of expert witnesses. More importantly, unlike the Crumpton plaintiff or the Castaline defendant, FPG cannot show any detrimental reliance or that it was truly surprised by evidence it could not have obtained with reasonable diligence. FPG does not point to any interrogatory response on which it detrimentally relied. In fact, FPG was aware before trial that a key issue of dispute was René’s involvement at FPG. FPG could not reasonably rely to its detriment on DFEH’s previous inability to discover evidence supporting its theory that was in FPG’s possession and control. No abuse of discretion has been shown.
B. Damage Award
FPG also argues the jury’s backpay award is not supported by substantial evidence. We review a jury’s damage award for substantial evidence. (Hope v. California Youth Authority (2005) 134 Cal.App.4th 577, 594.) “There are two aspects to a review of the legal sufficiency of the evidence. First, one must resolve all explicit conflicts in the evidence in favor of the respondent and presume in favor of the judgment all reasonable inferences. [Citation.] Second, one must determine whether the evidence thus marshaled is substantial. While it is commonly stated that our ‘power’ begins and ends with a determination that there is substantial evidence [citation], this does not mean we must blindly seize any evidence in support of the respondent in order to affirm the judgment. The Court of Appeal ‘was not created . . . merely to echo the determinations of the trial court. A decision supported by a mere scintilla of evidence need not be affirmed on review.’ [Citation.] ‘[I]f the word “substantial” [is to mean] anything at all, it clearly implies that such evidence must be of ponderable legal significance. Obviously the word cannot be deemed synonymous with “any” evidence. It must be reasonable . . . , credible, and of solid value . . . .’ [Citation.] The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record. [Citation.] While substantial evidence may consist of inferences, such inferences must be ‘a product of logic and reason’ and ‘must rest on the evidence’ [citation]; inferences that are the result of mere speculation or conjecture cannot support a finding.” (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1632–1633, italics & fns. omitted.)
The goal of a lost earnings award, under California Fair Employment and Housing Act, is “to make the individual whole.” (Cloud v. Casey (1999) 76 Cal.App.4th 895, 906, 909; accord, Civ. Code, § 3333 [“[f]or the breach of an obligation not arising from contract, the measure of damages . . . is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not”].) “ ‘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.’ ” (Hope v. California Youth Authority, supra, 134 Cal.App.4th at p. 595, italics omitted.) “[D]amages may not be based upon sheer speculation or surmise, and the mere possibility or even probability that damage will result from wrongful conduct does not render it actionable.” (In re Easterbrook (1988) 200 Cal.App.3d 1541, 1544, disapproved on other grounds by People v. Romero (1994) 8 Cal.4th 728, 744, fn. 10.)
FPG contends Escueta’s backpay award is problematic because the jury must have “ ‘assume[d]’ . . . that, absent the alleged discrimination, [Escueta] would have received a raise at a certain time and of a certain amount,” when the assumption is squarely contradicted by undisputed documentary evidence. Not so. Evidence was presented regarding the pay range for Level Two and Level Three proposition players. DFEH also presented evidence of the increased earning potential of proposition players as they advanced through the levels.
We do not agree with FPG that its records “conclusively demonstrate that FPG . . . does not award raises automatically upon promotion.” (Italics added.) Wong testified that, despite containing language showing the employee moving from a lower level to a higher level, the records DFEH relied on did not actually reflect promotions, but only raises based on performance. The jury was not compelled to believe Wong’s testimony. Resolving conflicts in the record in DFEH’s favor, as we must, the record shows that, despite varying rates of overall pay, players advancing to Level Two were uniformly awarded raises upon promotion. Finally, DFEH presented Escueta’s pay history, which shows she received an average raise of approximately 75 cents per hour per year, and a $2.00 per hour raise when she was promoted to Level Three.
It is irrelevant that there was no direct evidence that, absent discrimination, FPG would have promoted Escueta on a certain date. Escueta testified she first requested promotion to Level Two in 2010 and a Chinese male was promoted to that position shortly thereafter in September 2010. Thus, the jury could reasonably infer that, absent discrimination, Escueta would have been promoted to Level Two in September 2010, would have received a raise to $16 per hour at that time, and would have thereafter continued to receive average raises of approximately 75 cents per hour per year. That the jury ultimately awarded less than this amount does not show its award to be unsupported. It is not fatal that the reviewing court cannot with absolute precision look at the evidence and, making the necessary manipulations, arrive at the exact figure used in a jury verdict. (Benson Elec. Co. v. Hale Bros. Assoc., Inc. (1966) 246 Cal.App.2d 686, 695.)
FPG has not shown the jury’s economic damages award is speculative. Because FPG’s contention fails on the merits, we need not address DFEH’s argument that FPG forfeited its substantial evidence challenge by failing to fairly summarize the evidence in its opening brief.
III. DISPOSITION
The judgment is affirmed. DFEH shall recover its costs on appeal.
 



_________________________
BRUINIERS, J.


WE CONCUR:


_________________________
JONES, P. J.


_________________________
NEEDHAM, J.


























A148624