Court Opinion

ID: 9865589
Source: CourtListenerOpinion
Date Created: 2023-09-25 19:04:29.396445+00
Date Added: 2024-06-11T13:40:31.044919
License: Public Domain

Filed 9/25/23 Liza v. CKE Restaurants Holdings CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                         SECOND APPELLATE DISTRICT
                                        DIVISION TWO

 CARMEN LIZA,                                                     B313111
                                                                  B317323
           Plaintiff and Appellant,
                                                                  B318082
           v.
                                                                  (Los Angeles County
 CKE RESTAURANTS
                                                                  Super. Ct. No.
 HOLDINGS, INC., et al.,
                                                                  BC666232)
           Defendants and Appellants.

      APPEALS from judgments and postjudgment orders of the
Superior Court of Los Angeles County. Richard J. Burdge, Judge.
Affirmed.
      Employee Justice Legal Group, Kaveh S. Elihu and Sylvia
V. Panosian for Plaintiff and Appellant.
      Littler Mendelson, Fermin H. Llaguno, Heather M. Vigil
and Miko Sargizian for Defendants and Appellants.

                __________________________________________
       Carmen Liza (plaintiff) appeals from summary judgments
entered in favor of CKE Restaurant Holdings, Inc. (CKE), Carl’s
Jr. Restaurants, LLC (Carl’s Jr.), and Akash Management, LLC
(Akash) (collectively defendants). Plaintiff, a former employee,
sued defendants for disability discrimination under the
California Fair Employment and Housing Act (FEHA) (Gov.
Code, § 12900 et seq.)1 and related causes of action.
       Defendants appeal from the trial court’s postjudgment
orders denying their motion for attorney fees and granting
plaintiff’s motion to strike and tax costs.
       Discussing each appeal in turn, we affirm the summary
judgment. We also affirm the postjudgment orders denying the
motion for attorney fees and granting the motion to strike and
tax costs. We do not consider new issues raised by the parties in
their reply briefs. (United Grand Corp. v. Malibu Hillbillies, LLC
(2019) 36 Cal.App.5th 142, 158.)
                      PLAINTIFF’S APPEAL
       FACTUAL AND PROCEDURAL BACKGROUND
       In November 2014, plaintiff worked as a cook at a Carl’s Jr.
restaurant (Unit 66). Her work performance was satisfactory.
On March 6, 2016, plaintiff was placed on medical leave after
being injured at a second job.2 Plaintiff was scheduled to return
to Unit 66 on April 24, 2016, with some restrictions. In her
deposition, plaintiff testified she showed up ready to work on
April 23, 2016, but her supervisor said an April 7, 2016 letter had

      1 Undesignated statutory references refer to the
Government Code.
      2 Plaintiff’s deposition testimony reveals she injured her
back on March 6, 2016, while working at a Marriott Hotel.

                                 2
been sent to plaintiff terminating her employment. Plaintiff
testified she did not see this letter until weeks later. Plaintiff
testified her supervisor said the new owner did not want her
because she was injured. Plaintiff testified her coworkers had
retained their jobs as of April 23, 2016. Plaintiff testified she saw
them all that day working at Unit 66. Plaintiff alleged she lost
her job because of her disability, requests for accommodation, and
use of her medical leave.
       CKE owns Carl’s Jr. On April 18, 2016, Akash purchased
28 Carl’s Jr. restaurants, including Unit 66, to operate as
franchises. The sale was part of Carl’s Jr.’s transition from a
corporate to a franchise model. On the day of the sale, Carl’s Jr.
terminated all employees, including plaintiff, at the purchased
restaurants. The restaurants then closed briefly. The next day,
Unit 66 and the other 27 restaurants reopened as Carl’s Jr.
franchises with new employees hired by Akash. Plaintiff was not
among them.
       On April 12, 2017, plaintiff filed an administrative
complaint of employment discrimination against CKE with the
Department of Fair Employment and Housing (DFEH). She
received a right-to-sue notice the same day. Plaintiff also filed a
civil suit against CKE.
       Later, plaintiff filed successive amendments to her DFEH
complaint, adding first Carl’s Jr. and then Akash as respondents.
Plaintiff filed successive amendments to her civil suit, adding the
same two corporations as defendants.
       Plaintiff’s first amended complaint became the operative
pleading. It alleged five causes of action against defendants for
various FEHA causes of action, and causes of action for wrongful
termination in violation of public policy, declaratory judgment,

                                 3
and failure to permit inspection of personnel and payroll records.
An additional cause of action for failure to hire in violation of
FEHA was alleged solely against Akash. Plaintiff sought
punitive damages against defendants.
       Defendants each filed an answer. Among their affirmative
defenses, Carl’s Jr. and Akash alleged plaintiff failed to exhaust
her administrative remedies under FEHA. CKE and Akash
asserted they were not plaintiff’s employer.
       Defendants filed separate summary judgment or
adjudication motions on plaintiff’s first amended complaint and
their affirmative defenses. Following a hearing, the trial court
issued a 14-page order granting defendants’ summary judgment
motions.3 The court later entered judgments for defendants.
Plaintiff timely appealed.
                           DISCUSSION
       On appeal, plaintiff raises many purported errors by the
trial court in granting defendants’ summary judgment motions.
Plaintiff claims the motions should have been denied because
(1) she exhausted her DFEH administrative remedies against
Carl’s Jr. and Akash; (2) CKE and Akash were her employers;
(3) there was a triable issue that Akash refused to hire her in
violation of FEHA; (4) defendants misused the civil discovery
process; (5) her wrongful termination in violation of public policy
cause of action survived summary adjudication of her FEHA
causes of action; and (6) she was entitled to inspection of
defendants’ personnel and payroll records.

      3 The trial court made evidentiary rulings, which plaintiff
is not contesting on appeal.

                                 4
      As we discuss below, plaintiff failed to exhaust her
administrative remedies against Carl’s Jr. and Akash. She is,
therefore, precluded from exercising a private right of action to
enforce any FEHA claims against those two defendants. What
remains to be addressed is whether CKE was her employer and
plaintiff’s claims of error (4) through (6) have merit.
A.    Governing Law and Standard of Review
      A party in a civil case is entitled to summary judgment if,
among other things, the party can show the undisputed facts
“establish[] an affirmative defense” “as a matter of law.” (Code
Civ. Proc., § 437c, subds. (c) & (o)(2).) Thus, summary judgment
is appropriate where the undisputed facts establish that a claim
is barred by the failure to exhaust administrative remedies in the
FEHA context. (Martin v. Lockheed Missiles & Space Co. (1994)
29 Cal.App.4th 1718, 1724.) We independently review a trial
court’s grant of summary judgment. (Merrill v. Navegar, Inc.
(2001) 26 Cal.4th 465, 476.)
B.    Plaintiff Failed To Exhaust Her Administrative
      Remedies Before Suing Carl’s Jr. and Akash
      An employee aggrieved by an employer’s discriminatory
conduct who wishes to file a civil suit under the FEHA must first
exhaust available administrative remedies and obtain a right-to-
sue notice.4 (Basurto v. Imperial Irrigation Dist. (2012) 211

      4 Exhaustion of administrative remedies is “a jurisdictional
prerequisite” in the sense that it is a “precondition” to bringing a
civil action for statutory damages under FEHA. It does not go to
the trial court’s subject matter jurisdiction. (Kim v. Konad USA
Distribution, Inc. (2014) 226 Cal.App.4th 1336, 1345.) In other
words, failure to exhaust may result in the trial court’s lack of
authority to decide a case, not in its lack of power.

                                 5
Cal.App.4th 866, 879; Martin v. Lockheed Missiles & Space Co.,
supra, 29 Cal.App.4th at p. 1724.) This entails filing a written
charge with the DFEH within one year of the alleged unlawful
practice and obtaining a right-to-sue notice. (§ 12960, former
subd. (d).)5 The charge consists of “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 [DFEH].”
(§ 12960, subd. (c).) DFEH can then either pursue the matter
itself (§§ 12930, subd. (f), 12965, subd. (a)) or notify the
complainant—at the latest within 150 days of filing the
complaint—that DFEH will not be taking any further steps.
(§ 12965, subd. (c)(1)(A).) If DFEH elects this latter course, it
must at the same time inform the employee of the right to
request a right-to-sue notice. (Ibid.) The employee can also
request and obtain an immediate right-to-sue notice, thereby
waiving a DFEH investigation, which is what happened here.
(Cal. Code Regs., tit. 2, § 10005.)
        Plaintiff filed her DFEH complaint on April 12, 2017,
naming CKE in the caption, as the lone respondent and alleging:
“On or around April 23, 2016, complainant alleges that
respondent took the following adverse actions against
complainant: Discrimination, Retaliation, Denied a good faith
interactive process, Denied a work environment free of

      5 Effective January 1, 2020, the Legislature amended
section 12960 to “enlarge[] the time for filing a [DFEH] claim to
three years from the date of the challenged conduct.” (Brome v.
Dept. of the California Highway Patrol (2020) 44 Cal.App.5th
786, 793, fn. 2; see § 12960, subd. (e)(5).)

                                 6
discrimination and/or retaliation, Denied reasonable
accommodation, Terminated, other, failure to re-hire [sic].
Complainant believes respondent committed these actions
because of their [sic]: “Disability, Engagement in Protected
Activity.”
      The body of plaintiff’s DFEH complaint read in its entirety:
“On or about November 2014, [complainant] was hired to work by
[CKE]. On March 6, 2016, [complainant] was injured, and
thereafter received treatment and medical care, and as a result
was forced to take medical leave. [Complainant] advised her
supervisor, Sarai Doe, of her injuries, and advised her that she
was put off work by her doctor, and provided all of [sic] the
necessary medical documentation necessary [sic]. [Complainant]
updated her supervisors, including but not limited to Sarai Doe,
Jessica Doe, and Olivia Doe in regard to [sic] her medical
treatment and medical leave. [Complainant’s] leave ended on
April 23, 2016, and she was released to work with minor
restrictions on April 24, 2016. On or about April 23, 2016,
[complainant’s] employment was terminated in discrimination of
her disabilities/perceived disabilities, request for
accommodation(s), medical condition, medical leave, and in
retaliation for her engagement in protected activities with respect
to those protected classes.”
      As her DFEH complaint showed, plaintiff’s termination,
the basis of her FEHA claims, took place in April 2016.
However, plaintiff did not amend her DFEH complaint to
specifically name Carl’s Jr. until August 3, 2017, and Akash
until September 18, 2018. Both amendments were well over a
year later. From these undisputed facts and our Division Five
colleagues’ decision in Cole v. Antelope Valley Union High School

                                7
Dist. (1996) 47 Cal.App.4th 1505 (Cole), the trial court concluded
the amended DFEH complaint against Carl’s Jr. was untimely;
plaintiff failed to exhaust her administrative remedies.
       Plaintiff resists this conclusion. She acknowledges having
missed the one-year deadline to name Carl’s Jr. and Akash in the
original DFEH complaint and filing the amendments more than a
year later. Nonetheless, plaintiff insists she exhausted her
administrative remedies pursuant to the decision of Clark v.
Superior Court (2021) 62 Cal.App.5th 289, 292–293 (Clark).
       California courts have consistently held that, to be named
in a lawsuit under FEHA, a defendant must be named in the
body or the caption of a previously submitted DFEH complaint.
In Cole, the appellate court held a lawsuit could proceed against
a defendant named in the caption of the DFEH complaint, but
not against two defendants nowhere named in the complaint.
(Cole, supra, 47 Cal.App.4th at p. 1511; see also Valdez v. City of
Los Angeles (1991) 231 Cal.App.3d 1043, 1061 [lawsuit could not
proceed against individuals not named in the DFEH complaint];
Medix Ambulance Service, Inc. v. Superior Court (2002) 97
Cal.App.4th 109, 118 [lawsuit could not proceed against
defendants not named in the DFEH complaint’s caption or body];
Alexander v. Community Hospital of Long Beach (2020) 46
Cal.App.5th 238, 251 [same]; Saavedra v. Orange County
Consolidated Transportation etc. Agency (1992) 11 Cal.App.4th
824, 827 [lawsuit could proceed against a defendant supervisor
described in the body of the DFEH complaint, although the
caption named only the defendant employer]; Martin v. Fisher
(1992) 11 Cal.App.4th 118, 119 [same].)
       In Clark, the appellate court addressed the legal
consequences of a defendant who was misnamed in the DFEH

                                8
complaint. The court held, although the plaintiff failed to use the
defendant employer’s legal name, the name placed in the DFEH’s
caption was sufficiently similar to the employer’s actual fictitious
business name. The plaintiff thereby exhausted the requisite
administrative remedies because an administrative investigation
would have identified the employer. (Clark, supra, 62
Cal.App.5th at pp. 305–306; Guzman v. NBA Automotive, Inc.
(2021) 68 Cal.App.5th 1109, 1117 [same].)
       In this case, undisputed material facts establish plaintiff
failed to exhaust her administrative remedies. Neither Carl’s Jr.
nor Akash appeared anywhere in plaintiff’s original DFEH
complaint. CKE was not a fictitious business name for either
Carl’s Jr. or Akash. In fact, plaintiff’s deposition testimony, her
W2 forms, and paystubs identified Carl’s Jr. as her employer.
The three “Doe” supervisors referenced in the DFEH complaint
were not named defendants in plaintiff’s FEHA causes of action.
Plainly, plaintiff’s amended DFEH complaint against Carl’s Jr.
and Akash is untimely as a matter of law.
       Finally, plaintiff’s attempt to invoke the “relation back”
doctrine is futile. To be sure, the doctrine can render timely an
otherwise untimely amendment to a DFEH complaint “only if the
factual allegations in the original DFEH complaint are ‘able to
bear the weight of the new theory added by amendment.’ ”
(Foroudi v. The Aerospace Corp. (2020) 57 Cal.App.5th 992, 1003–
1004.) Plaintiff provides no authority for her contention that an
amendment adding one or more new respondents to a DFEH
complaint relates back to the original complaint. (See Ortiz v.
Sodexho, Inc. (S.D. Cal., July 26, 2011, No. 10-CV-2224 JLS RBB)
2011 U.S. Dist. Lexis 81065, 2011 WL 3204842 [in FEHA context,

                                 9
a DFEH complaint shall not be amended to add a new respondent
after the statute of limitations has expired].)
C.     CKE Was Not Plaintiff’s Employer
       Plaintiff’s first amended complaint alleged CKE and Akash
as well as Carl’s Jr. were her employers. Plaintiff’s theory was
the business relationships shared by the three entities made
them subject to alter ego, agency, joint employer, successor in
interest, or integrated enterprise liability for plaintiff’s alleged
unlawful termination. Unpersuaded, the trial court concluded
there was no triable issue that neither CKE nor Akash was
plaintiff’s employer. Pertinent here, the court found “CKE owns
Carl’s Jr.,” but “[i]t is undisputed that CKE and Carl’s Jr. are
separate business entities under the law.”
       On appeal, plaintiff contends the trial court erred by failing
to consider one or more of her proffered theories. Given our
conclusion that plaintiff cannot proceed against Akash (and
Carl’s Jr.), we limit our analysis to whether CKE and Carl’s Jr.
constituted an integrated enterprise or a single entity. It is the
only theory that plaintiff now argues to justify her contention
that CKE was her employer.
       California law presumes corporate entities have separate
existences. (Laird v. Capital Cities/ABC, Inc. (1998) 68
Cal.App.4th 727, 737 (Laird) [“there is a strong presumption that
a parent company is not the employer of its subsidiary’s
employees”].) To determine whether two corporations should be
viewed instead as a single entity, courts apply the “ ‘integrated
enterprise’ test.” This test originated in federal courts and was
first used in a state court by the Laird court. (Ibid.) The
integrated enterprise test consists of four factors:
(1) interrelation of operations; (2) common management;

                                 10
(3) centralized control of labor relations; and (4) common
ownership or financial control. (Ibid.) Common ownership or
control alone are not sufficient to establish an integrated
enterprise. (Id. at p. 738.) The most important factor is
“ ‘ “[w]hat entity made the final decisions regarding employment
matters related to the person claiming discrimination?”
[Citation.] A parent’s broad general policy statements regarding
employment matters are not enough to satisfy this prong.
[Citation.] To satisfy the control prong, a parent must control the
day-to-day employment decisions of the subsidiary.’ ” (Ibid.)
       Plaintiff urges the integrated enterprise test was satisfied
here because (1) CKE processed and stored plaintiff’s separation
report and leave of absence forms that had been completed and
sent by plaintiff’s Unit 66 supervisor; (2) executive officers of
CKE and Carl’s Jr. worked at the same corporate offices; (3) some
employees testified they worked for both corporations; and
(4) CKE provided health care benefits to Carl’s Jr. employees.
Similar assertions were made and rejected as inadequate by the
Laird court. (Laird, supra, 68 Cal.App.4th at pp. 738–741.)
Plaintiff’s showing was insufficient to raise a triable issue under
the integrated enterprise test.
D.     Plaintiff’s Remaining Claims Are Without Merit
       Plaintiff’s contention that defendants misused the
discovery process is without support in the record. Plaintiff’s
contention that her cause of action for wrongful termination in
violation of public policy survives summary judgment in the
absence of a finding of a FEHA violation is simply wrong; it is a
derivative of plaintiff’s FEHA disability discrimination and
retaliation causes of action. (Glynn v. Superior Court (2019) 42
Cal.App.5th 47, 56.) As for plaintiff’s claim that she was entitled

                                11
to her payroll and personnel records from defendants, it is
undisputed plaintiff never requested them. In sum, the trial
court properly granted defendants summary judgment.
                     DEFENDANTS’ APPEAL
        FACTUAL AND PROCEDURAL BACKGROUND
       On August 17, 2018, defendants served plaintiff with an
offer to compromise under Code of Civil Procedure section 998
(section 998). The section 998 offer provided that in exchange for
payment of $100,000, plaintiff would file a request for dismissal
of all claims with prejudice. The offer expired without plaintiff
having served an acknowledgment or objections.
       Following entry of judgments, as the prevailing parties on
the FEHA claims, defendants jointly sought attorney fees and
costs pursuant to Government Code section 12965. They argued
plaintiff’s lawsuit was “unreasonable, frivolous and meritless.”
As the prevailing parties, defendants jointly requested the same
attorney fees and costs pursuant to the fee shifting provisions of
Code of Civil Procedure section 998. Defendants’ memorandum
of costs totaled $350,155.51 in attorney fees and $39,300.75 in
costs.
       Plaintiff opposed defendants’ request for attorney fees and
costs, arguing her lawsuit was not “frivolous, unreasonable, or
groundless” and defendants acted in bad faith and with unclean
hands.

                                12
       Following a November 12, 2021 hearing, the trial court
denied defendants’ motion for attorney fees.6 Defendants timely
appealed.
       Plaintiff moved to strike and tax defendants’ costs. She
argued defendants should be barred from recovering their costs
for several reasons: (1) Her lawsuit was “not frivolous, without
foundation or unreasonable” under Government Code section
12965; (2) defendants’ Code of Civil Procedure section 998 offer
was premature and invalid, and (3) plaintiff lacked the financial
resources to pay defendants’ costs.
       Defendants opposed plaintiff’s motion to strike and tax
costs, arguing plaintiff failed to meet her burden to show
defendants’ costs were not reasonably incurred in a reasonable
amount. Additionally, defendants asserted that section 12965, as
amended and effective on January 1, 2019, did not apply
retroactively to lawsuits like this one, filed before that date.
       At the conclusion of a December 23, 2021 hearing, the trial
court granted plaintiff’s motion to strike and tax costs in its
entirety. Defendants timely appealed.
                            DISCUSSION
A.     Governing Law and Standard of Review
       The prevailing party in civil litigation is entitled to recover
costs, except as otherwise provided by statute. (Code Civ. Proc.,
§ 1032, subds. (a)(4), (b).)7 Attorney fees are allowable as costs to

      6 Although defendants moved for attorney fees and costs,
the trial court ruled only on defendants’ request for $350,155.51
in attorney fees.
      7 Code of Civil Procedure section 1032, subdivision (a)(4)
states: “ ‘Prevailing party’ includes the party with a net
monetary recovery, a defendant in whose favor a dismissal is

                                 13
a prevailing party when authorized by statute. (Code Civ. Proc.,
§§ 1021, 1033.5, subd. (a)(10)(B).)8
       Code of Civil Procedure section 998 alters the allocation of
costs awarded in civil litigation with the goal of promoting
pretrial settlement. (Martinez v. Brownco Construction Co.
(2013) 56 Cal.4th 1014, 1019 [intent of Code Civ. Proc. § 998 is to
encourage settlement of lawsuits before trial].) To that end, the
statute provides that “[i]f an offer made by a defendant is not
accepted and the plaintiff fails to obtain a more favorable
judgment or award, the plaintiff shall not recover his or her
postoffer costs and shall pay the defendant’s costs from the time
of the offer.” (Code Civ. Proc., § 998, subd. (c)(1).)
       FEHA, however, has its own provision for awarding
attorney fees and costs. Government Code section 12965 reads in
pertinent part: “In civil actions brought under this section, the

entered, a defendant where neither plaintiff nor defendant
obtains any relief, and a defendant as against those plaintiffs
who do not recover any relief against that defendant.” Code of
Civil Procedure section 1032, subdivision (b) states: “Except as
otherwise expressly provided by statute, a prevailing party is
entitled as a matter of right to recover costs in any action or
proceeding.”
      8 Code of Civil Procedure section 1021 states:     “Except as
attorney’s fees are specifically provided for by statute, the
measure and mode of compensation of attorneys and counselors
at law is left to the agreement, express or implied, of the parties;
but parties to actions or proceedings are entitled to their costs, as
hereinafter provided.” Code of Civil Procedure section 1033.5,
subdivision (c) states: “An award of costs shall be subject to the
following: [¶] . . . [¶] (3) Allowable costs shall be reasonable in
amount.”

                                 14
court, in its discretion, may award to the prevailing party . . .
reasonable attorney’s fees and costs . . . except that,
notwithstanding Section 998 of the Code of Civil Procedure, a
prevailing defendant shall not be awarded fees and costs unless
the court finds the action was frivolous, unreasonable, or
groundless when brought, or the plaintiff continued to litigate
after it clearly became so.” (Gov. Code, § 12965, subd. (c)(6).)9
       The burden is on the prevailing defendant seeking an
award of attorney fees and costs to show plaintiff’s FEHA claims
were frivolous, unreasonable, or unfounded. (Lopez v. Routt
(2017) 17 Cal.App.5th 1006, 1009.) This showing must also be
made by a FEHA defendant, who is treated as a prevailing party
by virtue of the plaintiff’s rejection of a section 998 offer and the
plaintiff’s failure to obtain a more favorable judgment than the
offer. (Mangano v. Verity, Inc. (2008) 167 Cal.App.4th 944, 948–
951 [a defendant is not entitled to attorney fees and costs simply
because the plaintiff lost the FEHA lawsuit].)

      9 The portion of section 12965 making a prevailing
defendant’s attorney fees and costs subject to the trial court’s
finding a lawsuit was frivolous became effective on January 1,
2019, as an addition to subdivision (b) of the statute. (Stats.
2018, ch. 955, § 5 (Sen. Bill No. 1300) eff. Jan. 1, 2019.) Effective
January 1, 2022, the Legislature renumbered former subdivision
(b) of section 12965 as current subdivision (c)(6). (Stats. 2021, ch.
278, § 7; see Stats. 2022, ch. 420, § 25.) The language of this
subdivision was left unchanged. The trial court’s postjudgment
orders, the parties’ motions at issue, their briefs on appeal, and
Supreme Court and appellate court decisions cited in this opinion
refer to section 12965, former subdivision (b), instead of section
12965, subdivision (c)(6). For clarity and consistency, we will
refer to the provision as section 12965, former subdivision (b).

                                 15
       A trial court’s order denying attorney fees and costs
pursuant to FEHA is reviewed under the deferential abuse of
discretion standard. (Chavez v. City of Los Angeles (2010) 47
Cal.4th 970, 989; Cummings v. Benco Building Services (1992) 11
Cal.App.4th 1383, 1387.)
B.     Trial Court’s Postjudgment Orders Were Not an
       Abuse of Discretion
       In denying the motion for attorney fees, the trial court
found defendants “failed to meet their burden to demonstrate
that [p]laintiff’s claims objectively lacked foundation from the
inception of the case, were maintained unreasonably, or were
without merit.” The court accepted plaintiff’s representations
(1) that she believed CKE was her employer based on CKE’s
correspondence and other employees’ testimony and (2) that she
only learned of Akash’s identity as Unit 66’s new owner during
the deposition of plaintiff’s supervisor.10 The court noted its
rulings on defendants’ demurrers only showed plaintiff’s
complaint was not defective on its face, not that her claims were
frivolous. The court found plaintiff’s failure to respond to
defendants’ section 998 offer was not evidence that her claims
were frivolous from the outset. In light of its findings, the court

      10 In overruling defendants’ demurrer to the first amended
complaint, the trial court commented, “So it seems that there are
various corporate entities that the poor employee working at the
restaurant doesn’t really know who the corporate entity is. Who
runs it. The corporate employers can hide behind that to avoid
any liability for what they do.” “I’m going to go back and consider
this, but it’s somewhat contrary to the policy of the Fair
Employment and Housing Act that the corporate employer[,] by
using different names and confusing its employees can avoid all
liability.”

                                16
declined to address the parties remaining arguments concerning
the reasonableness of the requested attorney fees.
       In granting plaintiff’s motion to strike and tax costs in its
entirety, the trial court relied on its prior finding that plaintiff’s
claims were not frivolous within the meaning of section 12965,
former subdivision (b). The court also rejected defendants’
argument the provision did not apply retroactively.
       As stated, we review these trial court’s orders for abuse of
discretion. Accordingly, we may not set aside the orders unless
the trial court exceeded the bounds of reason—that is, no judge
could have reasonably reached the contested result. (Department
of Motor Vehicles v. Superior Court (2002) 100 Cal.App.4th 363,
369; Maughan v. Google Technology, Inc. (2006) 143 Cal.App.4th
1242, 1249.) “We could therefore disagree with the trial court’s
conclusion, but if the trial court’s conclusion was a reasonable
exercise of its discretion, we are not free to substitute our
discretion for that of the trial court.” (Avant! Corp. v. Superior
Court (2000) 79 Cal.App.4th 876, 881–882.)
       It is clear from the written orders of the proceedings that
the trial court thoughtfully considered each party’s motion and
carefully evaluated the supporting evidence before making its
final rulings. From the court’s stated assessment of the parties’
evidence concerning the summary judgment motion, we cannot
say the court’s refusal to award defendants their attorney fees
and costs fell outside the court’s broad discretion.11

      11 Had the trial court decided to award defendants’
attorney fees and costs, it had plaintiff’s uncontroverted
declaration explaining why such an award would impose on her
an undue financial hardship as the sole provider for her family.
(See Robert v. Stanford University (2014) 224 Cal.App.4th 67, 70,

                                  17
C.    Defendants’ Remaining Contentions
      Defendants resurrect their argument that former
subdivision (b) of Government Code section 12965 does not
impact this lawsuit because the complaint was filed and the offer
to compromise was made prior to its effective date. As they did
before the trial court, defendants cite Holman v. Altana Pharma
US, Inc. (2010) 186 Cal.App.4th 262 (Holman) and Martinez v.
Eatlite One, Inc. (2018) 27 Cal.App.5th 1181 (Martinez) to argue
the court had discretion to award Code of Civil Procedure section
998 costs based on the pre-amended statute.
      In Holman, the appellate court held that neither Code of
Civil Procedure section 998 nor the version of Government Code
section 12965 in effect at the time required the trial court to find
the plaintiff’s FEHA lawsuit was frivolous before awarding
expert witness fees to a prevailing defendant. (Holman, supra,
186 Cal.App.4th at pp. 281–283.) In Martinez, the appellate
court held when determining whether the plaintiff is the
prevailing party, if costs and attorney fees are included in the

72–73 [trial court must consider the plaintiff’s ability to pay
before awarding attorney fees to a prevailing FEHA defendant];
Rosenman v. Christensen, Miller, Fink, Jacobs, Glaser, Weil &
Shapiro (2001) 91 Cal.App.4th 859, 868, fn. 42 [an award of
attorney fees “ ‘ “should not subject the [losing] plaintiff to
financial ruin” ’ ”]; Roman v. BRE Properties, Inc. (2015) 237
Cal.App.4th 1040, 1062 [“the trial court has discretion to deny or
reduce a cost award to a prevailing FEHA defendant when a
large award would impose undue hardship on the plaintiff—the
financial circumstances of the losing plaintiff and the impact of
the award on that party are relevant circumstances in
determining whether the costs to be awarded are ‘reasonable in
amount’ ”].)

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Code of Civil Procedure section 998 offer, the trial court should
consider the value of those costs and fees when calculating the
value of the offer. (Martinez, supra, 27 Cal.App.5th at pp. 1184–
1185.)
       The trial court rejected defendants’ argument because their
reliance on Holman or Martinez was misplaced. The court
concluded instead that Williams v. Chino Valley Independent Fire
Dist. (2015) 61 Cal.4th 97 (Williams) was controlling. It predated
former subdivision (b) of section 12965. Williams held that a
prevailing FEHA defendant can recover costs only if the
plaintiff’s lawsuit was “objectively without foundation when
brought, or the plaintiff continued to litigate after it clearly
became so.” (Id. at p. 115.)
       In Scott v. City of San Diego (2019) 38 Cal.App.5th 228
(Scott), the appellate court observed the Williams decision did not
address the interplay between Government Code section 12965,
former subdivision (b) and Code of Civil Procedure section 998 to
resolve the question “whether a prevailing defendant can be
awarded costs under section 998 in nonfrivolous FEHA claims.”
(Id. at p. 242.) After analyzing relevant caselaw and legislative
materials, Scott held the Legislature expressly intended that
Government Code section 12965, former subdivision (b) was to
clarify ambiguities in the application of Code of Civil Procedure
section 998 to FEHA claims, rather than to change current law
on the recovery of attorney fees and costs. As merely declaratory
of existing law, Scott concluded, there is no question of
retroactivity. (Id. at pp. 242–243.)
       We agree with the Scott decision and hold section 12965
former subdivision (b) (now subdivision (c)(6)) controls here.
Defendants were thus precluded from recovering attorney fees or

                                19
costs absent a showing that plaintiff’s claims were “frivolous,
unreasonable, or groundless when brought, or . . . plaintiff
continued to litigate after it clearly became so.” (§ 12965, former
subd. (b).)
       Defendants also contend they were entitled to recovery of
costs for the successful defense of plaintiff’s non-FEHA claims of
wrongful termination and declaratory judgment under Code of
Civil Procedure section 1032.
       Where a lawsuit alleges both FEHA and non-FEHA causes
of action, if there is no showing the FEHA claims were frivolous,
“only those costs properly allocated to non-FEHA claims may
be recovered by the prevailing defendant.” (Roman v. BRE
Properties, Inc., supra, 237 Cal.App.4th at p. 1062.) Where the
FEHA and non-FEHA claims overlap and are intertwined, the
trial court may not award costs on the non-FEHA claims. (Ibid.)
Where the non-FEHA claims are based on separate grounds, the
court may award costs under Code of Civil Procedure sections
1032 and 998 to the extent the claims led the defendants to incur
additional allowable costs not incurred in defending against the
FEHA claims. (Id. at pp. 1059, 1062.)
       Defendants contend the trial court abused its discretion
because they were entitled to recover costs for the successful
defense of plaintiff’s non-FEHA claims. Defendants point to
plaintiff’s wrongful termination and declaratory judgment claims
as being “separate and distinct” from plaintiff’s FEHA claims.
However, both are derivative of the failed FEHA disability
discrimination and retaliation claims, meaning they were based
on the same alleged misconduct as the FEHA claims and would
have triggered the same litigation expenses. Defendants
acknowledged as much in their motion for attorney fees. They

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asserted that apportionment of their fees was unnecessary;
plaintiff’s claims all arose from “the same common nucleus of
facts.” Nor have defendants demonstrated how the court could
have or should have allocated any costs to the defense of the
wrongful termination and declaratory judgment claims.
Defendants’ memorandum of costs and supporting documentation
failed to identify any additional expenses incurred solely to
defend against those claims.
       In sum, the record does not compel us to find the trial court
abused its discretion.
                           DISPOSITION
       The judgments and the postjudgment orders are affirmed.
Each side shall bear its own costs.

                                           LUI, P. J.

We concur:

      CHAVEZ, J.

      HOFFSTADT, J.

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