Court Opinion

ID: 2771422
Source: CourtListenerOpinion
Date Created: 2015-01-20 20:48:32.23101+00
Date Added: 2024-06-11T12:45:51.630804
License: Public Domain

Filed 1/20/15 Kohl v. Del Amo Hospital CA2/5
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION FIVE

KEITH KOHL,                                                          B255428

         Plaintiff and Appellant,                                    (Los Angeles County Super. Ct.
                                                                      No. BC502941)
         v.

DEL AMO HOSPITAL, INC., et al.,

         Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Los Angeles County, Gregory
W. Alarcon, Judge. Reversed and remanded.
         Henry J. Josefsberg for Plaintiff and Appellant.
         Lewis Brisbois Bisgaard & Smith, Roy G. Weatherup, Alan R. Zuckerman, Keri
Lynn Bush, for Defendants and Respondents.
                                         ________________________
          Plaintiff and appellant Keith Kohl appeals from a judgment in favor of defendants
and respondents Del Amo Hospital, Inc. and UHS of Delaware, Inc. (collectively, Del
Amo) after the trial court determined a contractual six-month limitations period barred all
the causes of action stated in Kohl’s complaint. The court ruled the shortened statute of
limitations was not invalid as being unconscionable or a public policy violation. Kohl
contends Ellis v. U.S. Security Associates (2014) 224 Cal.App.4th 1213 (Ellis) provides
grounds for reversing the trial court’s decision with respect to the causes of action he
asserts under the Fair Employment and Housing Act (FEHA) (Gov. Code, §§12900-
12996.)1 Kohl further contends that the shortened limitations period is unenforceable as
to his nonstatutory, common law claims. We conclude that enforcement of the shortened
limitations period would be unreasonable, not only as to Kohl’s FEHA claims, but as to
his common law claims for wrongful termination in violation of public policy and
wrongful demotion in violation of public policy as well.2 We reverse the judgment and
remand the cause for further proceedings.

                      FACTUAL AND PROCEDURAL BACKGROUND

          On August 1, 2011, Kohl signed and submitted an online application seeking
employment with Del Amo as a registered nurse. The last part of the application
consisted of a certification and agreement, about three-quarters of a page long, in which
the applicant certifies that the facts provided in the application are true, and agrees to 13
separate items “[i]n consideration of being employed.” Item number 13 stated: “READ
CAREFULLY BEFORE SIGNING. I agree that any claim or lawsuit relating to my
service with [Del Amo] must be filed no more than six (6) months after the date of the

          1   All further statutory references are to the Government Code, unless otherwise
stated.

          2
        Based on our conclusions, we decline to address other contentions raised on
appeal by Kohl.

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employment action that is the subject of the claim or lawsuit. I waive any statute of
limitations to the contrary.”
       Kohl’s employment with Del Amo began on August 25, 2011, and continued until
his termination on April 6, 2012. According to Kohl, while he was employed at Del Amo
as a night shift supervisor, he reported to his direct supervisor “multiple issues regarding
patient safety, medication consent, and staffing issues.” He was demoted to the position
of night shift charge nurse in February 2012, and terminated in April 2012. In a
complaint filed with the California Department of Fair Employment and Housing
(DFEH) on August 3, 2012, Kohl asserted he “was demoted and then terminated due
to . . . whistleblowing activity in an atmosphere of gender discrimination.” DFEH issued
a right to sue letter the same day.
       On March 14, 2013, Kohl filed an action against Del Amo, alleging eight causes
of action based on allegations of discrimination, retaliation, and wrongful termination.
Three of Kohl’s causes of action arose under FEHA and the remaining were nonstatutory,
common law causes of action. Del Amo’s answer included an affirmative defense based
on a contractual limitations period.
       Del Amo filed a pretrial motion seeking a bifurcated trial, requesting the court to
first decide whether Kohl’s claims were barred by a contractual limitations period. Del
Amo contended that all of Kohl’s claims were barred by the agreement imposing a six-
month limitations period on any claim or lawsuit relating to Kohl’s employment with Del
Amo.
       The court held a bench trial limited to the question of whether the contractually
shortened limitations period barred Kohl’s claims. Noting that there were no contested
factual issues and that neither side had cited governing law directly on point, the trial
court concluded that “the shortened statute of limitations is enforceable and a bar to this

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lawsuit, and not invalid as being unconscionable, or a public-policy violation per se.”
Kohl filed a timely appeal.3

                                       DISCUSSION

Standard of Review

       “It is a question of law whether a case or a portion of a case is barred by the statute
of limitations, and we are not bound by the trial court’s determination and instead
conduct a de novo review.” (Pugliese v. Superior Court (2007) 146 Cal.App.4th 1444,
1448; see also City of El Cajon v. El Cajon Police Officers’ Assn. (1996) 49 Cal.App.4th
64, 71 [contracts are reviewed de novo unless interpretation turns on extrinsic evidence];
Price v. Connolly-Pacific Co. (2008) 162 Cal.App.4th 1210, 1218 [issues presented based
on stipulated facts are reviewed de novo].)

FEHA Claims

       It is well-settled under California law that parties to a contract may agree to
shorten the statute of limitations, “provided the period fixed be not so unreasonable as to
show imposition or undue advantage in some way.” (Beeson v. Schloss (1920) 183 Cal.
618, 622 (Beeson).) In order to be reasonable, a contractually shortened limitations
period “‘must provide a party sufficient time to effectively pursue a judicial remedy. A
contractual period of limitation is reasonable if the plaintiff has a sufficient opportunity to
investigate and file an action, the time is not so short as to work a practical abrogation of
the right of action, and the action is not barred before the loss or damage can be

       3 Kohlfiled a notice of appeal on March 28, 2014, before judgment was signed
and entered on April 9, 2014. We treat the premature notice of appeal as a valid appeal
from the judgment. (In re Social Services Payment Cases (2008) 166 Cal.App.4th 1249,
1262.)

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ascertained. On the other hand, a contractual limitation provision that requires the
plaintiff to bring an action before any loss can be ascertained is per se unreasonable.’
[Citation.]” (Ellis, supra, 224 Cal.App.4th at p. 1223.) The reasonableness of the
agreement is determined based on the circumstances existing at the time the parties enter
into an agreement, not at the time the suit is filed. (Capehart v. Heady (1962) 206
Cal.App.2d 386, 389 (Capehart).)
       California courts have upheld contractual agreements to shorten applicable
limitations periods in a variety of contexts. (Tebbets v. Fidelity and Casualty Co. (1909)
155 Cal. 137, 139 [six-month limitations period on actions for benefits under an accident
life insurance policy not unreasonable]; Beeson, supra, 183 Cal. 618, 622 [six-month
period to bring action for unpaid commissions reasonable]; Capehart, supra, 206
Cal.App.2d 386, 391 [reasonable to require tenant to sue within three months of
landlord’s notice to quit].)
       Courts have examined whether it is substantively unconscionable to shorten the
applicable statute of limitations, particularly in the employment context. Some courts
have found unconscionability (see, e.g., Martinez v. Master Protection Corp. (2004) 118
Cal.App.4th 107, 117-118 (Martinez) [contractual six-month limitations period for
bringing statutory discrimination claims is unconscionable and insufficient to protect
employees’ right to assert their statutory rights]), while others have not (see, e.g., Soltani
v. Western & Southern Life Ins. Co. (9th Cir. 2001) 258 F.3d 1038, 1043 (Soltani) [“the
weight of California case law strongly indicates that the six-month limitation provision is
not substantively unconscionable”]; West v. Henderson (1991) 227 Cal.App.3d 1578,
1588 [six-month contractual limitations period in a lease not unconscionable, despite lack
of mutuality], overruled on other grounds in Riverisland Cold Storage, Inc. v. Fresno-
Madera Production Credit Ass’n (2013) 55 Cal.4th 1169).
       At the time the trial court ruled on the enforceability of the six-month limitations
period in the present case, no California court had examined whether it would be
unreasonable for parties to contractually shorten the statute of limitations applicable to
FEHA claims. Less than a month after the court held its bench trial and found the

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contractually shortened limitations period enforceable, the First District Court of Appeal
published Ellis, examining the very issue before the trial court in our case and holding
that an agreement for a six-month limitations period applicable to FEHA claims was
unreasonable and against public policy. (Ellis, supra, 224 Cal.App.4th at pp. 1220-
1232.) We briefly summarize the reasoning in Ellis below.
       The Ellis court first reviewed the public policies underlying the FEHA statutory
scheme and the protections it offers to employees, pointing out that the act “declares it
the ‘public policy’ of California to ‘protect and safeguard’ the rights of employees
against discrimination.” (Ellis, supra, 224 Cal.App.4th at p. 1220.) It explained the
administrative process for filing a claim with DFEH, noting that a claimant had one year
from the date of the unlawful act to file a claim, and one year after DFEH issued a “right
to sue” letter to file a lawsuit. (Id. at p. 1221.) Next, the court explained the policy
purposes behind statutes of limitations: “As distilled by our Supreme Court, there are
‘several policies underlying such statutes. One purpose is to give defendants reasonable
repose, thereby protecting parties from “defending stale claims, where factual obscurity
through the loss of time, memory or supporting documentation may present unfair
handicaps.” [Citations.] A statute of limitations also stimulates plaintiffs to pursue their
claims diligently. [Citations.] A countervailing factor, of course, is the policy favoring
disposition of cases on the merits rather than on procedural grounds. [Citations.]’
[Citation.]” (Ibid.)
       Turning next to the question of whether an employment application could contain
an agreement to shorten the limitations period applicable to FEHA claims, the Ellis court
pointed out that a leading employment law treatise had already called into question the
enforceability of such a provision, and that Martinez had found such a provision to be
“unconscionable, ‘permeated with illegality, and unenforceable.’ [Citation.]” (Ellis,
supra, 224 Cal.App.4th at. p. 1224.) In Martinez, the court emphasized that statutory
claims such as FEHA claims or wage and hour claims under the Labor Code have a
different status with respect to whether and how the statutory protections associated with
such claims may be waived. (Martinez, supra, 118 Cal.App.4th at pp. 117-118.)

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Specifically, in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24
Cal.4th 83, 101 (Armendariz), the California Supreme Court has emphatically held that
“parties agreeing to arbitrate statutory claims must be deemed to ‘consent to abide by the
substantive and remedial provisions of the statute . . . .’”
          The Ellis court then reasoned that because the FEHA statutory scheme provided a
two to three-year time frame for filing a lawsuit, the Legislature had determined that
period was necessary to provide an effective remedy under FEHA. In contrast, a six-
month period would not provide “‘sufficient time for the effective pursuit of the judicial
remedy.’” (Ellis, supra, 224 Cal.App.4th at p. 1225, quoting 3 Witkin, Cal. Procedure
(5th ed. 2008) Actions, § 469, p. 595.) Permitting an employee to agree to so
dramatically reduce the time frame for vindicating his or her statutory rights under FEHA
(from a maximum of three years down to six months) would violate the public policy
underpinning FEHA. (Ellis, supra, at p. 1225.)
          The Ellis court went on to discuss other aspects of the law that provided support
for its conclusion. In 2002, the Legislature had increased the limitations period
applicable to lawsuits seeking redress for wrongful acts or neglect resulting in personal
injury, finding a one-year period “unduly short” and adopting a two-year period to ensure
fairness to all parties. The Ellis court agreed with the legislative finding that an extended
limitations period would potentially reduce litigation because a victim would have more
time to investigate and develop a case, and potentially settle it before even filing a suit.
(Ellis, supra, 224 Cal.App.4th at p. 1226.) The Ellis court also pointed out that a six-
month limitations period would not be reasonable because it “effectively eliminates any
meaningful participation by the DFEH,” a key aspect of the FEHA statutory scheme.
(Ibid.) The court also found a six-month limitations period would lead to some
anomalous results, including differing deadlines for different acts, rather than a single
deadline measured from the date DFEH issues a right-to-sue letter, and a situation where
the corporate employer would have the benefit of a contractually shortened limitation
period, while individual defendants (who are not parties to the agreement) would not.
(Ibid.)

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       The Ellis court rejected the defendant’s argument, similar to the one made by
respondents in this appeal, that California law has historically permitted parties to freely
contract to shorten applicable limitations periods. It distinguished a number of
employment cases upholding shortened limitations periods, including Soltani. The
plaintiffs in Soltani sued for wrongful termination in violation of public policy and unfair
business practices, but did not assert any statutory claims under FEHA. The agreement
was also different, involving a six-month limitations period that began running from the
date of termination, therefore permitting a longer time for acts occurring during
employment. (Ellis, supra, at p. 1229.) The Ellis court instead focused on Soltani’s
striking of a 10-day notice provision as lacking any justification. Because there was no
proffered or reasonable justification for requiring an employee to provide the company a
written notification 10 days before filing suit, the Soltani court concluded that the effect
was “‘merely to “maximize employer advantage” and bar any suits relating to the
employment agreement.’” (Ellis, supra, at p. 1230, quoting Soltani, supra, 258 F.3d at
pp. 1046-1047.)
       Ultimately, we agree with Ellis’s reasoning that a contract that shortens the
limitations period for pursuing statutory claims, here plaintiff’s FEHA claims, merits
closer scrutiny by virtue of the fact that such agreements involve a statutory scheme
embodying legislatively enacted public policies that have been given special protection in
other contexts. (Sonic-Calabasas A., Inc. v. Moreno (2013) 57 Cal.4th 1109, 1145-1152;
Armendariz, supra, 24 Cal.4th at p. 101.) The Legislature has enacted a limitations
period and process uniquely applicable to FEHA claims. (§§ 12960, subd. (d); 12965,
subds. (b) and (d)). Decisions by the California Supreme Court clearly hold that private
parties cannot contractually waive the statutory protections contained in FEHA and
similar schemes. Relying on those decisions and Ellis, we conclude that the shortened,
six-month limitations period is unreasonable and unenforceable with respect to Kohl’s
FEHA claims.

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Common Law Claims

       We conclude the six-month limitations period is also unenforceable as to Kohl’s
common law wrongful termination and demotion causes of action because it would
undermine public policy and therefore be unreasonable to require the claims to be
brought in such a short time frame.
       Kohl seeks to proceed on two common law causes of action: wrongful demotion
in violation of public policy and wrongful termination in violation of public policy.4
Causes of action for wrongful demotion in violation of public policy and wrongful
termination in violation of public policy are only viable if a plaintiff alleges adverse
employment actions that contravene fundamental and substantial public policy. (Boston
v. Penny Lane Centers, Inc. (2009) 170 Cal.App.4th 936, 947 [plaintiff’s discharge for
complaining about unsafe work environment supported claim for wrongful termination in
violation of public policy]; Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 670-
671 [wrongful termination in violation of public policy]; Garcia v. Rockwell Internat.
Corp. (1986) 187 Cal.App.3d 1556, 1561 [wrongful demotion in violation of public
policy], abrogated on other grounds in Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083,
1093.) Such claims are often referred to as Tameny5 claims. The discussion in Ellis
about the public policies underlying the FEHA statutory scheme persuades us that
enforcing a contractually shortened limitations period with respect to Tameny claims
would also not be reasonable. Doing so would reduce the time to bring a Tameny claim
from one year (Barton v. New United Motor Manufacturing, Inc. (1996) 43 Cal.App.4th
1200, 1209) to six months, and would impact not only the contracting parties, but the

       4 Kohl’s  counsel conceded at oral argument he would no longer be pursuing the
cause of action for intentional infliction of emotional distress. The record does not reveal
why the causes of action for unsafe working conditions and unfair business practices,
originally pled in Kohl’s complaint, were no longer at issue at trial. Our analysis only
addresses the remaining two common law causes of action.

       5   Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 (Tameny).

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public that has a generalized interest in continued enforcement of well-established public
policies. Our conclusion is supported by the holding in Little v. Auto Stiegler, Inc. (2003)
29 Cal.4th 1064, 1077, where the California Supreme Court concluded that employees
could not contractually waive their right to bring Tameny claims because “an
employment agreement that required employees to waive claims that they were
terminated in violation of public policy would itself be contrary to public policy.” The
court explained its reasoning as follows: “A Tameny claim is almost by definition
unwaivable. ‘[The] public policy exception to the at-will employment rule must be based
on policies “carefully tethered to fundamental policies that are delineated in
constitutional or statutory provisions . . . .”’ [Citation.] Moreover, the public policy that
is the basis for such a claim must be ‘“‘public’ in that it ‘affects society at large’ rather
than the individual, must have been articulated at the time of discharge, and must be
‘“fundamental”’ and ‘“substantial”’”’ [Citation.] Thus, a legitimate Tameny claim is
designed to protect a public interest and therefore ‘“cannot be contravened by a private
agreement.”’ [Citation.]” (Ibid.)

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                                     DISPOSITION

       The judgment is reversed and the cause is remanded for further proceedings.
Parties to bear their own costs on appeal.

              KRIEGLER, J.

We concur:

              TURNER, P. J.

              GOODMAN, J. *

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

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