Winston v. Countrywide Financial CA2/7 ( 2013 )

Filed 3/11/13 Winston v. Countrywide Financial CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 SEVEN
MICHAEL WINSTON, B232823
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. LC085895)
v.
ORDER MODIFYING OPINION
COUNTRYWIDE FINANCIAL AND DENYING REHEARING
CORPORATION et al., (NO CHANGE IN JUDGMENT)
Defendants and Appellants.
THE COURT:
It is ordered that the opinion filed herein on February 19, 2013 be modified as
follows:
1. At the top of page 6, the sentence beginning “Dick Sambol, Countrywide‟s
then-president,” delete the name “Dick” and replace it with “David” so that the sentence
reads:
David Sambol, Countrywide‟s then-president, asked Winston to report directly to
him on the project (because Moody‟s “can shut us down”).
2. On page 16, all of footnote 14, beginning “Winston‟s reliance on Donchin”
is deleted and the following footnote is inserted in its place:
14
Winston‟s reliance on our decision in Donchin v. Guerrero (1995)
34 Cal.App.4th 1832 is misplaced. In Donchin, a premises liability action, the
plaintiff alleged a landlord had actual knowledge of the vicious nature of a
tenant‟s dogs and was responsible for her injuries after the dogs had attacked her.
(Id. at pp. 1835-1837.) The landlord initially denied any knowledge the tenant had
dogs, a statement he later admitted was false. (Id. at p. 1835.) In a sworn
declaration submitted in support of his motion for summary judgment, he stated he
knew about the dogs but lacked any knowledge of their violent propensities.
(Ibid.) We reversed the trial court‟s order granting summary judgment in favor of
the landlord, explaining, first, a jury reasonably could infer from the landlord‟s
earlier false exculpatory statement denying knowledge of the dogs‟ existence that
his later statement denying knowledge of their violent propensities was likewise
false (id. at pp. 1840-1843); and second, “[t]he inference [the landlord‟s] denial of
knowledge should be disbelieved is bolstered further by some of the affirmative
evidence [plaintiff] offered suggesting the landlord indeed possessed, or must have
possessed, knowledge about the rottweilers‟ propensities.” (Id. at p. 1843.) Based
on the entire record before the trial court on the summary judgment motion—that
is, both a reasonable basis for disbelieving the landlord‟s testimony and
affirmative evidence that he must have known the dogs were vicious—we
concluded the evidence would support a jury verdict in favor of the plaintiff and,
therefore, granting summary judgment was improper. (Id. at p. 1845.)
Nothing in Donchin’s holding or analysis supports Winston‟s argument the
jury here was entitled to infer Goren had disparaged Winston to Fishel simply
because it disbelieved Fishel‟s testimony. Moreover, unlike the landlord in
Donchin, Fishel never recanted his testimony or made a demonstrably false
exculpatory statement that could justify a secondary inference his stated reasons
for not hiring Winston were pretextual. Absent conclusive evidence of such a
falsehood, the inference he gave pretextual reasons for the decision not to hire
Winston was unduly speculative and does not constitute substantial evidence in
support of the jury‟s verdict. (See Donchin v. Guerrero, supra, 34 Cal.App.4th at
p. 1839.)
There is no change in the judgment. Respondent‟s petition for rehearing is denied.
____________________________________________________________________
PERLUSS, P. J. WOODS, J. JACKSON, J.
2
Filed 2/19/13 Winston v. Countrywide Financial CA2/7 (unmodified version)
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 SEVEN
MICHAEL WINSTON, B232823
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. LC085895)
v.
COUNTRYWIDE FINANCIAL
CORPORATION et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los Angeles County, Bert
Glennon, Jr., Judge. Reversed.
Davis Wright Tremaine, Henry J. Tashman, John P. LeCrone and Camilo
Echavarria for Defendants and Appellants Countrywide Financial Corporation and Bank
of America Corporation.
The Mathews Law Group, Charles T. Mathews; Pine & Pine, Norman Pine,
Beverly Tillett Pine and Janet R. Gusdorff for Plaintiff and Respondent.
_________________________________
Michael Winston, a human resources executive with nearly 30 years of experience
in his field, sued Countrywide Financial Corporation, his former employer, and its
successor, Bank of America Corporation, for wrongful termination and fraud after Bank
of America acquired Countrywide in 2008 and declined to offer him continued
employment. Winston alleged Countrywide had disparaged him to the Bank of America
executive charged with determining which Countrywide human resources employees
should be offered new positions with Bank of America in retaliation for actions he took
in 2006. A jury agreed Winston had been wrongfully terminated and awarded him more
than $3 million for lost wages. The trial court denied Countrywide and Bank of
America‟s motion for judgment notwithstanding the verdict.
We reverse. Although a jury verdict is entitled to broad deference, Winston‟s
evidence was insufficient to establish Bank of America declined to offer him a job based
on impermissible motives.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Evidence at Trial
a. Winston’s hiring by Countrywide
Winston, who had previously worked at several Fortune 500 companies including
Lockheed Martin, McDonnell Douglas, Motorola and Merrill Lynch, was hired by
Countrywide‟s director of human resources, Leora Goren, in April 2005 to assist
Countrywide in executive leadership development and succession planning.
Countrywide had experienced rapid growth in the previous decade, and Goren advised
Winston the company needed to develop more robust leadership systems to support that
growth. Winston relocated from northern California based on Countrywide‟s bright
future, in part as portrayed by Goren.
Winston performed well at Countrywide and was promoted by Goren during the
next year.1 In June 2006 Winston‟s team launched an executive leadership development
1 Notwithstanding these promotions, Goren identified several weaknesses in
Winston‟s performance in his December 2005 annual review. According to Goren,
2
program aimed at “the top brass of the company.” Angelo Mozilo, chairman of the board
and chief executive officer of Countrywide, attended the first of the planned six-part
program modules and complimented Winston on the event, indicating the program was
exactly what Countrywide needed. A national human resources publication recognized
the new program implemented by Winston as the 15th best in the nation among
companies with more than 2,000 employees.
On July 17, 2006 Goren announced a restructuring of the human resources
division that transferred responsibility for non-executive employee training to Josh
Klarin, a newly hired human resources executive.2 Although the number of employees
reporting directly to Winston was reduced, he remained in charge of executive leadership
development and was named a managing director of the company with the title of
enterprise chief leadership officer.
b. Winston experiences retaliation by Goren and other Countrywide
executives
According to Winston, the first incident that led to a pattern of retaliation against
him occurred on July 26, 2006, shortly after Goren‟s announcement of the restructuring.
The building housing Winston‟s team was undergoing renovation; and, in Winston‟s
words, “I first heard a sound like a low humming sound . . . and before I even could look
up, I felt like vapor droplets hitting my head. . . . [Immediately] I felt unbelievably dizzy,
unbelievably nauseated, pounding headache, shortness of breath. . . . I [saw] pinkish,
orange droplets coming down.” Winston‟s assistant, who was with him in his office,
“Michael is exceptionally articulate and thoroughly knowledgeable in his field.” “There
are occasions when he could be more concise in his communications and it is imperative
that he be more judicious in sharing certain thoughts with and making certain comments
in front of more junior employees in his organization. Additionally, . . . Michael
occasionally responds emotionally when faced with challenges. A calmer reaction is
generally more effective.”
2 Emails and memoranda between Winston and members of his team demonstrate
the restructuring spawned a turf war between Klarin‟s and Winston‟s groups as duties
and reporting lines shifted. Winston‟s own notes reveal significant frustration over his
perception his work was not properly appreciated or compensated.
3
testified she saw “a fog” and felt like her lungs had been “seared.” Approximately 10
other employees reported discomfort or burning in their lungs, a metallic taste in their
mouths and headaches. The effects were limited to the area near Winston‟s office.
Winston reported the incident to Countrywide‟s safety office, which initiated an
investigation. As part of the safety manager‟s response to the incident, company nurses
contacted employees in the affected area and offered medical assistance if needed.
Testing performed throughout the building, however, failed to identify the source of the
discharge.3
Immediately after the event Winston contacted Goren, who was out of the office
on vacation, and thereafter made “daily” efforts to get Countrywide “to do something
about it.” Expecting Goren‟s appreciation for his diligent response, Winston was
surprised when she appeared angry at him upon her return. When he questioned her
decision to announce to employees that testing had shown no danger, she acknowledged
the testing had not yet been completed but told him she was trying to prevent panic
among employees.4 After the testing had been completed, Winston continued to
advocate for further answers and asked the company to report the incident to the
California Division of Occupational Safety and Health (Cal-OSHA). On August 7, 2006,
having heard no response to his request, he personally reported the incident to Cal-
OSHA.5
3 Countrywide hired two outside companies to test air quality in the building.
Neither was able to identify any harmful substance.
4 Initial test results were reported to Goren on August 2, 2006, shortly after her
return to the office.
5 Kimberley Jimenez-Pennington, the Countrywide employee responsible for
investigating any notifications received by Cal-OSHA, testified Countrywide received a
letter from Cal-OSHA around this time relating to the failure to secure plastic sheeting
intended to isolate areas under renovation. A copy of the notification was posted for
employee review, and she conducted an inspection to ensure administrative and
engineering controls remained in place. She received no other complaints from Cal-
OSHA and did not understand the single complaint received to relate to the discharge in
Winston‟s office.
4
Winston testified that, immediately following his complaint to Cal-OSHA, many
of his programs were cancelled or put on hold.6 In his words, he experienced “death by a
thousand cuts” in a retaliation campaign he attributed to Goren. Two employees in his
group noted the hostile atmosphere and also identified Goren as the source. Several
weeks after the incident, while Winston was away on a business trip, Klarin, to whom
several of Winston‟s reporting employees had been transferred, held a meeting in
Winston‟s office with the remaining members of Winston‟s staff and told them Winston
would not be returning and all executive leadership programs had been placed on hold.
Upon Winston‟s return Goren would not answer questions about the meeting, but
Winston was not terminated.
At Winston‟s request he met with Goren on September 13, 2006 to discuss his
position at Countrywide. He informed Goren he believed he was being retaliated against
through the removal of his responsibilities and employees because of his report to Cal-
OSHA and advised her he had consulted with an attorney. Goren referred his complaint
to Countrywide‟s legal department and requested an investigation.7
Winston testified the retaliation against him personally increased in December
2006 as a result of his work in response to an audit by Moody‟s Investors Services, Inc.
(Moody‟s), a rating agency that evaluates the quality of securities issued by a company.
Among other consequences, a poor rating by Moody‟s can dramatically affect the
availability and cost to a company of operating capital, a critical component of
Countrywide‟s business as a lender. In particular, Moody‟s requested information
relating to the strength of Countrywide‟s succession planning, an area of review
prompted by the sudden departure in May 2005 of Countrywide‟s president and chief
operating officer Stan Kurland (who had been Mozilo‟s anticipated successor) and the
6 August 2006 also brought the first signs of financial trouble for Countrywide. A
10 percent budget cut, coupled with a hiring freeze, were ordered across the entire
company, including the human resources division.
7 The legal department conducted an investigation, but the record does not reveal
what, if any, action resulted.
5
company‟s delay of several months in replacing him. Goren asked Winston to prepare a
response to Moody‟s on this question. To assist him in preparing a competent response,
Winston asked Goren for information about Countrywide‟s previous succession plans,
but Goren did not provide it. Dick Sambol, Countrywide‟s then-president, asked
Winston to report directly to him on the project (because Moody‟s “can shut us down”).
When Winston‟s report offered no explanation for the gap between Kurland‟s departure
and Sambol‟s appointment, Sambol asked Winston to “cooperate” on the proposed
explanation to Moody‟s to, as Winston believed, obscure the actual length of time the
position had been unfilled. Winston replied, “I think I understand what you want me to
do . . . . I am not your guy.”
According to Winston, the consequences were swift and harsh. In an email dated
January 24, 2007 (about six weeks after the conversation) Mozilo wrote to Goren and
Sambol demanding Winston‟s immediate termination. Mozilo complained about
Winston‟s “motivations and overall attitude and demeanor,” citing Winston‟s personal
website advertising himself as a motivator, entertainer and networker: “He cannot serve
two masters.” Goren objected to Mozilo‟s directive, stating it would not be in the
company‟s best interest and praised Winston as “an extremely talented, albeit eccentric,
individual” and “an expert in the Leadership field.” She suggested any negative
comments about Winston had come from the outside consultant who had previously
performed Winston‟s functions for Countrywide and disputed the notion his speaking
activities were incompatible with his work for the company. Sambol joined in this
recommendation and told Mozilo they would “continue monitoring his performance and
periodically revisit the issue.” Mozilo reluctantly accepted this recommendation but
noted “[e]ccentric people are by definition not team players” and Winston could be
replaced by someone who was “talented” but also “proud to be on our team rather than
feel superior to the team.”
Notwithstanding the retaliation against Winston personally, his team rolled out the
second and third modules of the executive leadership development program in September
and December 2006 and the third, fourth and fifth modules in the spring and summer of
6
2007. One of the key members of Winston‟s team testified support within the company‟s
leadership for the executive development initiatives actually improved during 2007. The
team also developed a new model for succession planning within executive leadership.
Based largely on Winston‟s initiatives, Countrywide‟s executive development program
was named eighth best in the nation in 2007 by the same industry publication, having
improved from the previous year‟s showing of 15th. Winston testified, however, his
team continued to be dismantled, and Sambol refused to acknowledge him. He was also
forced to relocate his office seven times and was not invited to critical executive
meetings.
c. Bank of America decides to acquire Countrywide but declines to offer
Winston a post-acquisition position
By the fall of 2007, the mortgage industry was imploding. The sixth and final
module of the executive leadership program, which had been scheduled for fall 2007, was
cancelled when Countrywide‟s business plummeted and the company announced yet
another round of cutbacks and layoffs.8 In January 2008 Bank of America, which had
invested $2 billion in Countrywide in August 2007, announced plans to acquire
Countrywide. By that time, Winston was managing only two employees.
As part of Bank of America‟s acquisition of Countrywide, it initiated a transition
process to evaluate which programs and personnel to retain. Each Countrywide
employee was directed to complete a talent profile recounting the employee‟s work
history, education and skills. Although a form was completed for Winston, he testified
he never saw it and noted errors he said he never would have made.9 Goren, who was
8 Between August 2006, when Countrywide initiated company-wide budget cuts of
10 percent, and December 31, 2007 Countrywide laid off 12,000-plus employees, more
than one-third of its work force.
9 Winston claimed the form omitted mention of his rapid promotion at Lockheed
two decades earlier and his brief tenure at NVidia, a software company that had
employed him for several months immediately before Countrywide hired him. He also
noted several inaccurate dates, including the date he received his doctoral degree.
Winston provided no information, however, as to who else might have completed the
7
never considered for employment at Bank of America, was also asked to evaluate the
strengths and weaknesses of the employees who reported directly to her, including
Winston, whom she supposedly ranked last. No witness was able to authenticate the
document containing this ranking, however; and it was not admitted at trial.
Brian Fishel, senior vice president of enterprise executive development for Bank
of America, was assigned the task of evaluating Countrywide‟s leadership and
performance management group (headed by Winston) and its training group (headed by
Klarin) for employment by Bank of America. Fishel, who had seen Winston‟s talent
profile but had not seen or been informed of Goren‟s rankings, interviewed members of
the two groups, including Winston, in June 2008. Before the interviews began, Fishel
met with Goren for 15 to 20 minutes. Fishel acknowledged he had spoken with Goren
about Winston and Klarin but denied she had said anything negative about Winston or
mentioned either of the two events Winston claimed led to retaliation against him.10
Specifically, Fishel stated he had no knowledge of the July 2006 chemical release in
Winston‟s office or Winston‟s subsequent complaint to Cal-OSHA or that Countrywide
had been required to respond to Moody‟s in December 2006. According to Fishel, he
alone made the decision not to offer Winston a position at Bank of America.
In fact, of the 14 employees interviewed, Fishel chose to hire only three lower-
level employees. None of the six managing directors who reported to Goren was offered
a position with Bank of America, including Winston and Klarin. Explaining his decision
not to hire Winston, Fishel testified his own position at Bank of America was equivalent
to Winston‟s at Countrywide and the bank was not looking to replace or modify its
existing executive development programs, its succession plans or other human resources
form. Other employees with knowledge of the process testified the form was supposed to
have been completed by Winston but also could have been completed by his assistant.
10 At trial, neither Goren nor Samuels was asked questions about Fishel‟s decision
not to hire Winston. The other Countrywide senior executives who testified at trial—
Mozilo, Sambol and Andrew Gissinger—insisted they had not spoken with anyone at
Bank of America about Winston. Indeed, Mozilo left the company in February 2008,
long before the decision was made.
8
functions within Winston‟s areas of expertise. Moreover, Winston‟s base salary at
Countrywide in 2007 exceeded that of Fishel‟s. Fishel also testified he found Winston to
be arrogant during the interview and did not believe he would fit well with Bank of
America‟s corporate culture.
Winston‟s account of the interview differed markedly. According to Winston,
Fishel first tried to get Winston to divulge the secrets of his success. Within minutes,
however, Fishel told Winston, “I know how it feels to be acquired and not have a job
after that. . . . Don‟t worry. You‟ll bounce back.” Winston testified he was astonished
Fishel failed to identify any possible positions he might be able to fill at Bank of
America.
Winston received his official notice of severance, conditioned on finalization of
Countrywide‟s acquisition by Bank of America, on June 30, 2008. The letter advised, “If
the merger is not consummated, this notice will have no effect.” The acquisition was
concluded in July 2008, and Winston received a severance package valued at
$877,086.23. Although Winston testified he had made “Herculean” efforts to find
another job following his termination, he was unable to do so.
2. The Jury’s Verdict and Posttrial Motions
The jury rejected Winston‟s claims of fraud in his hiring but found he had been
wrongfully terminated. It awarded $3,828,166 in past and future economic damages, but
nothing for past and future emotional distress. The jury also rejected Winston‟s request
for punitive damages. Judgment was entered on February 24, 2011.
Countrywide and Bank of America moved for judgment notwithstanding the
verdict based on Winston‟s failure to establish Bank of America‟s decision not to hire
him was based on an improper, retaliatory motive. Without answering this contention
explicitly, the trial court denied the motion, reasoning the jury had shown careful
consideration of the factual issues in its verdicts and had before it ample evidence on a
variety of subjects relating to the decision not to hire Winston.
9
DISCUSSION
1. Governing Law and Standard of Review
The cause of action for wrongful termination in violation of public policy is an
exception to the general rule that an employer has an unfettered right to terminate an at-
will employee: Although an employer has the right to terminate at-will employees for
any or no reason, even an arbitrary or irrational reason, the employer does not have the
right to terminate an employee in violation of a substantial and fundamental public
policy. (Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 335; see also Stevenson v.
Superior Court (1997) 16 Cal.4th 880, 889-890; Tameny v. Atlantic Richfield Co. (1980)
27 Cal.3d 167, 169-170.) To support a claim for wrongful termination in violation of
public policy, the policy allegedly violated must be articulated, at the time of the
discharge, in a constitutional or statutory provision. (Stevenson, at pp. 889-890; see
Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 76.)
To prevail on a cause of action for wrongful termination resulting from retaliation,
whether under the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) or
other statutory authority, a plaintiff must show (1) he or she engaged in protected
activity; (2) the employer discharged the employee; and (3) a causal link existed between
the protected activity and the discharge—for instance, the employer harbored a retaliatory
motive against the employee that led to the discharge. (See Yanowitz v. L’Oreal USA,
Inc. (2005) 36 Cal.4th 1028, 1042; Soukup v. Law Offices of Herbert Hafif (2006)
39 Cal.4th 260, 287-288; Guthrey v. State of California (1998) 63 Cal.App.4th 1108,
1125.) “„The retaliatory motive is “proved by showing that plaintiff engaged in protected
activities, that his employer was aware of the protected activities, and that the adverse
action followed within a relatively short time thereafter.” [Citation.] “The causal link
may be established by an inference derived from circumstantial evidence, „such as the
employer‟s knowledge that the [employee] engaged in protected activities and the
proximity in time between the protected action and allegedly retaliatory employment
decision.‟” [Citation.]‟ [Citation.] „Essential to a causal link is evidence that the
10
employer was aware that the plaintiff had engaged in the protected activity.‟” (Morgan v.
Regents of University of California (2000) 88 Cal.App.4th 52, 69-70.)
Proof of intentional discrimination or retaliation often depends on circumstantial
evidence because it consists of “subjective matters only the employer can directly know,
i.e., his attitude toward the plaintiff and his reasons for taking a particular adverse
action.” (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 713 (Mamou);
accord, Joaquin v. City of Los Angeles (2012) 202 Cal.App.4th 1207, 1219 (Joaquin).)
As Joaquin explains, “Given the resulting difficulties of proof, the courts have fashioned
a special presumption shifting the burden of production—but not persuasion—to the
employer upon a prescribed showing by the plaintiff. Specifically, „the employee “may
raise a presumption of discrimination by presenting a „prima facie case,‟ the components
of which vary with the nature of the claim, but typically require evidence that „(1) [the
plaintiff] was a member of a protected class [or engaged in a protected activity], (2) he
was qualified for the position he sought or was performing competently in the position he
held, (3) he suffered an adverse employment action, such as termination, demotion, or
denial of an available job, and (4) some other circumstance suggests discriminatory [or
retaliatory] motive. [Citations.]‟ A satisfactory showing to this effect gives rise to a
presumption of discrimination which, if unanswered by the employer, is mandatory—it
requires judgment for the plaintiff.”‟” (Joaquin, at p. 1220, quoting Mamou, at pp. 713-
714; see also Morgan v. Regents of University of California, supra, 88 Cal.App.4th at
p. 68.)
Once the employee makes the required showing, to avoid an adverse judgment the
employer must then produce evidence to rebut the presumption of discrimination or
retaliation: “Once an employee establishes a prima facie case [of retaliation], the
employer is required to offer a legitimate, nonretaliatory reason for the adverse
employment action. [Citation.] If the employer produces a legitimate reason for the
adverse employment action, the presumption of retaliation „“„drops out of the picture,‟”‟
and the burden shifts back to the employee to prove intentional retaliation.” (Yanowitz v.
L’Oreal USA, Inc., supra, 36 Cal.4th at p. 1042; accord, Joaquin, supra, 202 Cal.App.4th
11at p. 1220; McRae v. Dept. of Corrections and Rehabilitation (2006) 142 Cal.App.4th
377, 388-389 (McRae).) “„The ultimate question is whether the employer intentionally
discriminated, and proof that “the employer‟s proffered reason is unpersuasive, or even
obviously contrived, does not necessarily establish that the plaintiff‟s proffered reason
. . . is correct.‟ [Citation.] In other words, “[i]t is not enough . . . to disbelieve the
employer; the factfinder must believe the plaintiff‟s explanation of intentional
discrimination.” [Citation.]‟” (Frank v. County of Los Angeles (2007) 149 Cal.App.4th
805, 824, quoting Reeves v. Sanderson Plumbing Products, Inc. (2000) 530 U.S. 133,
146-147 [120 S.Ct. 2097, 147 L.Ed.2d 105].) “The central issue is and should remain
whether the evidence as a whole supports a reasoned inference that the challenged action
was the product of discriminatory or retaliatory animus.” (Mamou, supra, 165
Cal.App.4th at p. 715; accord Joaquin, supra, 202 Cal.App.4th at p. 1226, fn. 5.)
The jury found Bank of America‟s 2008 decision not to hire Winston, which
resulted in his termination by Countrywide, was motivated by retaliation for his June
2006 complaint to Cal-OSHA and his December 2006 refusal to make any misleading
statements in the report to Moody‟s.11 The sole issue in this appeal is whether the jury‟s
verdict was supported by substantial evidence. Defendants contend Bank of America had
legitimate reasons not to offer employment to Winston and these reasons were not
pretextual. Indeed, Countrywide and Bank of America argue Winston failed to prove
Bank of America even knew of the 2006 episodes he claims motivated its decision not to
hire him.
Countrywide and Bank of America bear a heavy burden in this court: “[T]he
reviewing court must start with the presumption that the record contains evidence
sufficient to support the judgment; it is appellant‟s burden to demonstrate otherwise.”
(Baxter Healthcare Corp. v. Denton (2004) 120 Cal.App.4th 333, 368.) “„Actions for
unlawful discrimination and retaliation are inherently fact-driven, and we recognize that
11 The parties do not dispute this conduct constituted protected activity for purposes
of Winston‟s wrongful termination claim.
12
it is the jury, and not the appellate court, that is charged with the obligation of
determining the facts. Nonetheless, the jury‟s verdict stands only if it is supported by
substantial evidence. “In determining whether a judgment is supported by substantial
evidence, we may not confine our consideration to isolated bits of evidence, but must
view the whole record in a light most favorable to the judgment, resolving all evidentiary
conflicts and drawing all reasonable inferences in favor of the decision of the trial court.
[Citation.] We may not substitute our view of the correct findings for those of the trial
court [or jury]; rather, we must accept any reasonable interpretation of the evidence
which supports the [factfinder‟s] decision. However, we may not defer to that decision
entirely. „[I]f the word “substantial” means 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 in nature, credible, and
of solid value; it must actually be “substantial” proof of the essentials which the law
requires in a particular case.‟” (Joaquin, supra, 202 Cal.App.4th at pp. 1218-1219,
quoting Beck Development Co. v. Southern Pacific Transportation Co. (1996)
44 Cal.App.4th 1160, 1203, 1204; accord, McRae, supra, 142 Cal.App.4th at pp. 389-
390.)
“„“[A] judgment may be supported by inference, but the inference must be a
reasonable conclusion from the evidence and cannot be based upon suspicion,
imagination, speculation, surmise, conjecture or guesswork. [Citation.] Thus, an
inference cannot stand if it is unreasonable when viewed in light of the whole record.
[Citation.] And although an appellate court will normally defer to the trier of fact‟s
drawing of inferences, it has been said: „To these well settled rules there is a common
sense limited exception which is aimed at preventing the trier of the facts from running
away with the case. This limited exception is that the trier of the facts may not indulge in
the inference when that inference is rebutted by clear, positive and uncontradicted
evidence of such a nature that it is not subject to doubt in the minds of reasonable men.
The trier of the facts may not believe impossibilities.‟”‟” (Joaquin, supra,
13
202 Cal.App.4th at p. 1219; accord, McRae, supra, 142 Cal.App.4th at p. 390; Frank v.
County of Los Angeles, supra, 149 Cal.App.4th at pp. 816-817.)
2. There Was Insufficient Evidence for the Required Showing Bank of America’s
Decision Not To Hire Winston Was Based on an Impermissible Retaliatory
Motive
The linchpin of Winston‟s claim was the assertion Bank of America knew about
his protected activity in reporting a safety violation to Cal-OSHA and in refusing
Sambol‟s request he alter the Moody‟s report to misrepresent the timing of Sambol‟s
appointment as Countrywide‟s president. There is no evidence, either documentary or
testimonial, linking Bank of America‟s decision not to hire Winston to either of these
events.
The decision not to hire Winston was made on behalf of Bank of America by
Fishel. That Fishel‟s stated reasons for not hiring Winston were legitimate and non-
retaliatory is indisputable. According to Fishel, Bank of America had no open position
for an executive employee with Winston‟s expertise because Fishel himself held the
equivalent position at Bank of America. No evidence contradicts this testimony by
Fishel. Winston‟s attempt to discredit Fishel‟s testimony with a 2007 job announcement
he claims demonstrated Bank of America had recruited him possibly to replace Fishel
and his assertion his skills and experience exceeded Fishel‟s are irrelevant. Fishel was
Bank of America‟s leadership development executive, and Bank of America was not
required to displace him to make room for Winston. Further, the fact Winston‟s salary at
Countrywide exceeded Fishel‟s Bank of America salary corroborates Fishel‟s conclusion
the bank‟s interests would not be served by hiring Winston. Finally, albeit subjective in
nature and thus possibly insufficient standing alone to constitute a legitimate, non-
retaliatory reason for an adverse job action, Fishel‟s impression that Winston was
personally arrogant—a perception that comported with the testimony of other
Countrywide employees—is a permissible reason for an employer not to hire a
prospective employee.
14
To counter the facial legitimacy of Fishel‟s stated reasons, Winston asserts
Fishel‟s decision not to offer him a position resulted from Goren‟s negative attitude about
Winston, which she conveyed either during the meeting she had with Fishel shortly
before their interview or through a memorandum she allegedly prepared ranking Winston
last of her directly reporting employees.12 Fishel, however, denied Goren made any
negative comments about Winston during that meeting and testified he never spoke with
any other Countrywide executive about Winston, including Mozilo, who had left
Countrywide several months earlier in February 2008. Fishel, in fact, denied any
knowledge of the 2006 events Winston claims formed the basis of the retaliation against
him, and Winston has not presented any evidence to the contrary.13
Absent evidence Goren‟s perceived antipathy toward him was actually
communicated in some manner to Fishel, Winston may not infer it must have occurred
from the mere opportunity afforded by Goren‟s meeting with Fishel. Winston argues the
jury clearly disbelieved Fishel, the only person who was questioned about the
conversation. Disbelief of this testimony, however, does not constitute affirmative
evidence of the contrary proposition. (See California Shoppers, Inc. v. Royal Globe Ins.
Co. (1985) 175 Cal.App.3d 1, 48 [“[i]f a witness testifies, for instance, that it was not
12 As discussed, the memorandum in which Goren ranked her employees was not
admitted into evidence; and Goren was not asked any questions about it. We are,
therefore, precluded from considering it on appeal. (See Frank v. County of Los Angeles,
supra, 149 Cal.App.4th at p. 815 [“[i]t is axiomatic that in reviewing the liability aspect
of a judgment based on a jury verdict, we may not review exhibits identified, but not
admitted at trial”]; USLIFE Savings & Loan Assn. v. National Surety Corp. (1981)
115 Cal.App.3d 336, 343 [facts, events, documents or other matters urged by party not
admitted into evidence cannot be included in the record on appeal and are outside scope
of review].)
13 Winston‟s assertion he told Fishel during the interview he had experienced
retaliation by Countrywide is not supported by the record. The testimony he cites, a
single reference to this rather remarkable proposition, is ambiguous at best. In fact, it
appears the conversation referred to was with the expert witness who testified on the
subject of damages, not Fishel. We have considered the other inferences advocated by
Winston and find them equally speculative.
15
raining at the time of the collision, and if the jury disbelieves that testimony, such
disbelief does not provide evidence that it was raining at the time of the collision”];
Hicks v. Reis (1943) 21 Cal.2d 654, 660 [if the finder of fact refuses to give credence to a
witness‟s testimony, the testimony “„is of no more effect than if it had not been given. It
disappears from the case . . .‟”].) As Judge Learned Hand explained more than a half-
century ago, “It is true that the carriage, behavior, bearing, manner and appearance of a
witness—in short, his „demeanor‟—is part of the evidence. The words used are by no
means all that we rely on in making up our minds about the truth of a question that arises
in our ordinary affairs, and it is abundantly settled that a jury is as little confined to them
as we are. . . . [fn. omitted.] [S]uch evidence may satisfy the tribunal, not only that the
witness‟ testimony is not true, but that the truth is the opposite of his story; for the denial
of one, who has a motive to deny, may be uttered with such hesitation, discomfort,
arrogance or defiance, as to give assurance that he is fabricating, and that, if he is, there
is no alternative but to assume the truth of what he denies. [¶] Nevertheless, although it
is therefore true that in strict theory a party having the affirmative might succeed in
convincing a jury of the truth of his allegations in spite of the fact that all the witnesses
denied them, we think it plain that such a verdict would nevertheless have to be directed
against him. This is owing to the fact that otherwise in such cases there could not be an
effective appeal. . . . He, who has seen and heard the „demeanor‟ evidence, may have
been right or wrong in thinking that it gave rational support to a verdict; yet, since that
evidence has disappeared, it will be impossible for an appellate court to say which he
was.” (Dyer v. MacDougall (2d Cir. 1952) 201 F.2d 265, 267-268 (Hand., L., J.); accord,
Viner v. Sweet (2004) 117 Cal.App.4th 1218, 1229-1230.)14
14 Winston‟s reliance on Donchin v. Guerrero (1995) 34 Cal.App.4th 1832, in which
a landlord was charged with actual knowledge of the vicious nature of a tenant‟s dogs, is
misplaced. In reversing summary judgment in favor of the landlord, the court relied in
part on the landlord‟s false denials of his knowledge when initially informed of the
lawsuit, which the court concluded could constitute evidence of consciousness of
liability, especially in light of the broad agreement of other witnesses the dogs were
consistently aggressive and threatening. Winston argues the jury here was entitled to
16
Winston alternatively argues we should apply what is known as the “cat‟s paw”
doctrine, which recognizes the improper motive of a non-decisionmaker may be imputed
to the decisionmaker in certain circumstances. (See, e.g., Staub v. Proctor Hospital
(2011) ___ U.S. ___ (Mar. 1, 2011, No. 09-400) [131 S.Ct. 1186, 179 L.Ed.2d 144].) In
Staub the United States Supreme Court held the plaintiff had proven employment
discrimination on the “cat‟s paw” theory by producing evidence that his supervisors‟
actions “were motivated by hostility toward [his] military obligations” and “were causal
factors underlying [the] decision to fire [him].” (Id. at p. 1194; see also Poland v.
Chertoff (9th Cir. 2007) 494 F.3d 1174, 1182 [“if a subordinate, in response to a
plaintiff‟s protected activity, sets in motion a proceeding by an independent
decisionmaker that leads to an adverse employment action, the subordinate‟s bias is
imputed to the employer if the plaintiff can prove that the allegedly independent adverse
employment decision was not actually independent because the biased subordinate
influenced or was involved in the decision or decisionmaking process”].) Unlike Poland,
however, Winston has failed to show how Goren affected Fishel‟s decision either directly
or indirectly. Bank of America‟s acquisition of Countrywide, and its ensuing selection of
some, but by no means all, Countrywide employees for retention, cannot be traced to
Goren‟s antipathy toward Winston.
Instead, this case is similar to the Ninth Circuit‟s decision in Cafasso v. General
Dynamics C4 Systems, Inc. (9th Cir. 2011) 637 F.3d 1047, in which the court rejected the
plaintiff‟s “cats paw” theory. As the court explained, the employer justified its
termination of the plaintiff as part of a corporate reorganization unrelated to her protected
infer Goren had disparaged Winston to Fishel because it found Fishel‟s testimony false.
However, there is no basis for such an inference. Unlike the landlord in Donchin, Fishel
never recanted his testimony or made a demonstrably false exculpatory statement.
Indeed, Donchin correctly states the applicable rule in this scenario: “[A]ctual
knowledge can be inferred from the circumstances only if, in light of the evidence, such
inference is not based on speculation or conjecture. . . . [O]nly where the circumstances
are such that the defendant „must have known‟ and not „should have known‟ will an
inference of actual knowledge be permitted.” (Id. at p. 1839.)
17
inquiries; and the official who terminated the plaintiff testified he did not know about her
inquiries when he made the reorganization decision. (Id. at p. 1060.) The plaintiff failed
to produce any contrary evidence and admitted in her deposition she had no reason to
disbelieve his account. (Ibid.) To have established liability on the part of the employer,
the plaintiff would have had to show “that one of [the decisionmaker‟s] subordinates, in
response to [the plaintiff‟s] protected activity, „set[] in motion‟ [the] decision to eliminate
[her] department and job, and that the subordinate „influenced or was involved in the
decision or decisionmaking process.‟” (Id. at p. 1061.) Because the plaintiff failed to
“set forth non-speculative evidence of specific facts” this chain of events in fact occurred,
the court concluded a finding of liability would require “undue speculation.” (Ibid.)
The instant case is markedly similar to the situation in Cafasso. Bank of
America‟s acquisition of Countrywide did not revolve around Winston or his colleagues
in the human resources division. Bank of America (in a move it certainly came to regret)
acquired Countrywide for its loan portfolio, not its subsidiary support functions. Bank of
America was a far larger company with substantial existing institutional systems to
support its operations. Within the small realm of Winston‟s and Klarin‟s groups, only
three lower-level employees were hired by Bank of America to integrate into those
existing systems. Moreover, Winston was hardly the only executive at his level not to be
hired by Bank of America; to the contrary, Bank of America retained none of the top
executives in Winston‟s chain of command and none of the managing directors who
reported to Goren. Winston has not shown that the history of retaliation he experienced
formed the basis for Bank of America‟s decision not to hire him.
In short, having scoured the record for evidence supporting the jury‟s verdict on
the issue of causation, we have found none. It follows that the trial court erred in denying
defendants‟ motion for judgment notwithstanding the verdict. (See, e.g., Hauter v.
Zogarts (1975) 14 Cal.3d 104, 110 [“„A motion for judgment notwithstanding the verdict
of a jury may properly be granted only if it appears from the evidence, viewed in the light
most favorable to the party securing the verdict, that there is no substantial evidence to
support the verdict. If there is any substantial evidence, or reasonable inferences to be
18
drawn therefrom, in support of the verdict, the motion should be denied.‟”]; Henrioulle v.
Marin Ventures, Inc. (1978) 20 Cal.3d 512, 515 [appellate court in reviewing trial court‟s
grant or denial of a motion for judgment notwithstanding the verdict uses same standard
of review as employed by the trial court in deciding the motion].)15
DISPOSITION
The judgment is reversed. Countrywide and Bank of America are to recover their
costs on appeal.
PERLUSS, P. J.
We concur:
WOODS, J.
JACKSON, J.
15 We also reject Winston‟s contention Countrywide and Bank of America forfeited
their sufficiency of the evidence argument by presenting only the facts and inferences
favorable to their position. (See, e.g., Schmidlin v. City of Palo Alto (2007)
157 Cal.App.4th 728, 738 [“[w]here a party presents only facts and inferences favorable
to his or her position, „the contention that the findings are not supported by substantial
evidence may be deemed waived‟”]; Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1247
[appellant‟s “recitation of facts fails to discuss all evidence material to his contentions.
We therefore find . . . [he] has waived [claims of insufficiency of the evidence] on
appeal”].) The opening brief addressed all material facts relevant to the limited argument
made by Countrywide and Bank of America on appeal.
19