NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

McCONNELL, P.J.

INTRODUCTION

After a jury trial, Teecha Chamblee obtained a $50,000 judgment against her former employer, Inland Behavioral and Health Services, Inc., (IBHS) for wrongful constructive termination and retaliation for reporting what she perceived to be illegal practices. Chamblee appeals orders after entry of judgment (1) denying her motion for attorney fees, (2) denying her motion to tax IBHS's costs, and (3) granting IBHS's motion to tax her costs. Chamblee contends the court should have awarded her attorney fees pursuant to either Code of Civil Procedure section 2033.420, subdivision (a),1 for proving facts IBHS did not admit in responses to written requests for admission or section 1021.5 for enforcement of an important right affecting the public interest. She also contends IBHS's offer to compromise her claim pursuant to section 998 for $75,000 plus reasonable attorney fees was invalid and the court erred in awarding IBHS its postoffer costs and in denying her postoffer costs. We conclude the court did not abuse its discretion in denying Chamblee attorney fees or in awarding costs pursuant to section 998. We, therefore, affirm the orders.

BACKGROUND

IBHS, a nonprofit corporation, provides medical, dental, pharmaceutical, and social services as well as transportation at locations in San Bernardino and Banning, California. Chamblee worked as a clinic manager from December 10, 2012, until she resigned effective November 15, 2013. Chamblee told coworkers she left to take another job closer to her home. In September 2014 Chamblee testified in another lawsuit involving IBHS that she left because she felt her supervisor, IBHS's chief executive officer (CEO), had cut off communication after Chamblee tried to discipline the CEO's daughter.

Chamblee filed a lawsuit against IBHS in January 2015 contending she was wrongfully constructively terminated in violation of public policy and wrongfully retaliated against in violation of Labor Code section 1102.5 for complaining about practices Chamblee believed were illegal or improper. Chamblee alleged she reported to the CEO and the chief operating officer practices Chamblee perceived to be illegal or not in compliance with state or federal regulations. These practices included, "(a) calculation of food stamps as income to adjust patient's incomes in order to charge higher fee amounts for clinical care; [¶] (b) unsafe working conditions for outreach workers enrolling new patients; [¶] (c) charges for patient visits already covered by local and state programs; [¶] (d) a clinic doctor's failure to make patient chart entries which jeopardized patient safety; [¶] (e) charging `no-show' fees to Medi-Cal patients when they missed appointments, and [¶] (f) other illegal and excessive charges on clinic patients." Chamblee alleged the CEO constructively demoted her and retaliated against her for making these complaints by excluding her from meetings, refusing to communicate with her, denying her access to certain parts of the building, and ceasing to delegate tasks to Chamblee.

A jury found in favor of Chamblee on both of her claims. It found IBHS retaliated against Chamblee and constructively demoted her "because she reported and/or refused to participate in an activity she had reasonable cause to believed would violate a state or federal statute, or a local, state, federal rule or regulation" and IBHS intentionally created or knowingly permitted retaliatory working conditions "so intolerable that a reasonable person in Ms. Chamblee's position would have no reasonable alternative except to resign," which she did.

The jury awarded Chamblee $27,500 in damages ($2,500 in economic damages and $25,000 in noneconomic damages). It also awarded $22,500 in punitive damages.

DISCUSSION

I

Cost of Proof Fees Under Section 2033.420

Chamblee contends the court abused its discretion in denying her attorney fees incurred to prove at trial facts IBHS denied in requests for admission. We disagree.

A

"Section 2033.420, subdivision (a) states: `If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney's fees.' (Italics added.) The trial court must make such order unless it finds (1) an objection to the request was sustained or a response to it was waived under section 2033.290, (2) the admission sought was of no substantial importance, (3) the party failing to make the admission had reasonable ground to believe that that party would prevail on the matter, or (4) there was other good reason for the failure to admit. (§ 2033.420, subd. (b).) `"On appeal, the trial court's decision will not be reversed unless the appellant demonstrates that the lower court abused its discretion."'" (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 903.)

"`Under the deferential abuse-of-discretion review, we have no authority to substitute our own decision for that of the trial court. [Citation.] Our inquiry is limited to determining whether the trial court's decision exceeds the bounds of reason.'" (Id. at p. 904.)

"`In evaluating whether a "good reason" exists for denying a request to admit, "a court may properly consider whether at the time the denial was made the party making the denial held a reasonably entertained good faith belief that the party would prevail on the issue at trial."'" (Grace v. Mansourian (2015) 240 Cal.App.4th 523, 529.) "Costs of proof are recoverable only where the moving party actually proves the matters that are the subject of the requests. (§ 2033.420, subd. (a).) This means evidence must be introduced. [Citations.] Further, those amounts cannot be awarded if the parties stipulated to facts, even if the responding party had previously denied them. [Citations.] The purpose of requests for admissions is to expedite trial and a stipulation achieves that goal." (Id. at pp. 529-530.)

B

Chamblee propounded to IBHS the following relevant requests for admission:

The request defined "ILLEGAL PRACTICES" as "practices and conduct at IBHS that is illegal or not in compliance with state and federal regulations. These practices and conduct include but are not limited to: [¶] (a) The calculation of food stamps as income to adjust patient's incomes in order to charge higher fee amounts for clinical care; [¶] (b) The unsafe working conditions for outreach workers enrolling new patients; [¶] (c) The charges for patient visits already covered by local and state programs; [¶] (d) A clinic doctor's failure to make patient chart entries which jeopardized patient safety; [¶] (e) Charging `no-show' fees to Medi-Cal patients when they missed appointments, and [¶] (f) Other illegal and excessive charges on clinic patients." It defined "NON-COMPLIANT PRACTICES" as "any practices at IBHS that violated federal or state statutes or practices that were non-compliant with local, state, or federal regulations."

In response to requests 1 through 6, IBHS objected to the term "ILLEGAL PRACTICES" as vague and ambiguous and assuming facts not in evidence and noted the request did not identify federal, state, or local statutes or regulations allegedly violated. Without waiving the objections, IBHS responded substantially that it was "aware that [Chamblee] relayed information which had been provided to her as follows: on or about March 18, 2013, [Chamblee] informed [CEO] that she had received a call from Provider Relations at Inland Empire Health Plan relaying to [Chamblee] that offices may not charge no-show fees to Medi-Cal patients." IBHS denied the conveyance of this information involved "ILLEGAL PRACTICES" or constituted a "report."

IBHS additionally denied CEO excluded Chamblee from meetings that had been "a requirement of her job," or that CEO attempted to force Chamblee to implement illegal or noncompliant practices.

At trial, CEO acknowledged conversations took place about fees for no-show patients, use of food stamps in calculations, and provider documentation. However, the CEO denied Chamblee reported illegal conduct or that IBHS's practices were improper. IBHS offered expert testimony to show IBHS's practices were proper.

The court determined IBHS reasonably believed it answered the requests for admission correctly at the time it did so. Although the jury determined Chamblee believed or perceived IBHS practices were illegal or noncompliant with regulations, the jury was not asked to find the practices were indeed illegal. The court did not apply a heightened standard for determining if expenses are appropriate under section 2033.420. Rather, it determined the issue of whether the practices complained of were actually illegal or noncompliant with regulations, which was the focus of the requests for admission, was not substantially important to the jury's verdict. The court did not abuse its discretion in denying Chamblee cost of proof fees.

II

Public Benefit Fees Under Section 1021.5

Chamblee contends her litigation conferred a significant benefit affecting the public interest because she blew the whistle about impropriety of practices at IBHS and the court erred in denying her motion for attorney fees pursuant to section 1021.5. We disagree.

A

Section 1021.5 provides "a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any."

"`[T]he Legislature adopted section 1021.5 as a codification of the "private attorney general" attorney fee doctrine that had been developed in numerous prior judicial decisions. . . [T]he fundamental objective of the private attorney general doctrine of attorney fees is "`to encourage suits effectuating a strong [public] policy by awarding substantial attorney's fees . . . to those who successfully bring such suits and thereby bring about benefits to a broad class of citizens.'"'" (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1217-1218 (Whitley).)

"`"An award on the `private attorney general' theory is appropriate when the cost of the claimant's legal victory transcends [the claimant's] personal interest, that is, when the necessity for pursuing the lawsuit placed a burden on the plaintiff `out of proportion to [the claimant's] individual stake in the matter.'"'" (Whitley, supra, 50 Cal.4th at p. 1215.) Where, however, the party "had a `personal financial stake' in the litigation `sufficient to warrant [the] decision to incur significant attorney fees and costs in the vigorous prosecution' of the lawsuit, an award under section 1021.5 is inappropriate." (Millview County Water Dist. v. State Water Resources Control Bd. (2016) 4 Cal.App.5th 759, 768-769.) Code of Civil Procedure awards fees to "one whose personal stake is insufficient to otherwise encourage the action," but "was not designed as a method for rewarding litigants motivated by their own pecuniary interests who only coincidentally protect the public interest." (Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, 114.)

"In deciding whether to award fees, the court `must realistically assess the litigation and determine, from a practical perspective, whether or not the action served to vindicate an important right so as to justify an attorney fee award under a private attorney general theory.' [Citation.] A reviewing court `will uphold the trial court's decision to award attorney fees under section 1021.5, unless the court has abused its discretion.'" (Vasquez v. State of California (2008) 45 Cal.4th 243, 251.)

B

In denying the motion for attorney fees under section 1021.5, the court stated it would be improper to award fees for litigation "done to advance [Chamblee's] own personal or economic interest." The court stated it found the litigation was not pursued "for the public interest, which would have rendered a significant benefit" because there was no clear ruling from the jury's verdict that IBHS did anything illegal. We agree.

Chamblee sued IBHS for constructive termination and retaliation based on how she was treated at her place of work by her supervisor. Chamblee did not seek injunctive or declaratory relief. She sought and recovered general damages, special damages and punitive damages. As the court found, the jury did not find IBHS's practices in general were illegal or noncompliant, only that Chamblee was retaliated against for voicing concerns about practices she believed to be illegal or noncompliant. These findings were not significant to the general public. (Davis v. Farmers Ins. Exchange (2016) 245 Cal.App.4th 1302, 1329 (Davis).)

Chamblee sought to resolve her case and another matter for $1 million shortly after the case was filed. The fact Chamblee recovered significantly less than she expected and less than she expended in litigation fees is of no moment.

"`Private attorney general fees are not intended to provide insurance for litigants and counsel who misjudge the value of their case, and vigorously pursue the litigation in the expectation of recovering substantial damages, and then find that the jury's actual verdict is not commensurate with their expenditure of time and resources.'" (Davis, supra, 245 Cal.App.4th at pp. 1329-1330; see Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1352 [in comparing the cost of litigation to the plaintiffs' stake, "`we do not look at the plaintiffs' actual recovery after trial, but instead we consider `the estimated value of the case at the time the vital litigation decisions were being made'"].) The court did not abuse its discretion in denying attorney fees for public interest litigation.

III

Section 998 Costs

Chamblee finally contends the court erred in awarding IBHS costs and in denying her costs after IBHS submitted an offer to compromise pursuant to section 998 because the offer was not valid. Again, we disagree.

A

Section 998, subdivision (c)(1), states in pertinent part, "If 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."

This section is an exception to the general rule of section 1032 to award only a prevailing party costs. (See Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1112 ["Section 998 modifies the general rule of section 1032."].) It makes an award of ordinary costs mandatory against a plaintiff who did not accept a statutory offer to compromise and failed to obtain a more favorable judgment. Section 998 is "`a cost-shifting statute which encourages the settlement of actions, by penalizing parties who fail to accept reasonable pretrial settlement offers. A plaintiff who refuses a reasonable pretrial settlement offer and subsequently fails to obtain a "more favorable judgment" is penalized by a loss of prevailing party costs and an award of costs in the defendant's favor.'" (Guerrero v. Rodan Termite Control, Inc. (2008) 163 Cal.App.4th 1435, 1440.) In Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1562, the appellate court explained section 998 "is designed to create economic incentives on both parties to settle rather than try their lawsuits. To do so, both sides must face some economic consequences if it turns out they miscalculate and lose."

We review the validity or reasonableness of an offer under section 998 for abuse of discretion. (Whatley-Miller v. Cooper (2013) 212 Cal.App.4th 1103, 1113.)

B

IBHS served Chamblee with a statutory offer to compromise pursuant to section 998 in February 2015, shortly after she commenced her lawsuit, but several months after she testified against IBHS in another lawsuit. IBHS offered to settle all of Chamblee's claims against it for $75,000 and "in addition thereto pay [Chamblee's] statutory costs, including attorneys' fees, incurred to the date of this offer to be determined by a neutral arbitrator" selected from three proposed arbitrators, all of whom were retired judges. The offer was conditioned upon "execution and transmittal of a general release by [Chamblee] in favor of [IBHS], its directors, officers, employees, agents, and insurer" and upon entry of a request for dismissal with prejudice of Chamblee's complaint.

Chamblee rejected the offer several days later and submitted a counter offer demanding to settle her case and an unrelated case for a combined $1 million. Chamblee offered to provide a written release "in favor of IBHS, its agents and employees" and stated "[t]here has been ample time for IBHS and its attorneys to determine the merits" of Chamblee's case.

In denying Chamblee's motion to tax IBHS's costs and granting IBHS's motion to tax Chamblee's postoffer costs, the court determined the offer was valid and made in good faith. The court noted the provision for an arbitrator to determine costs and attorney fees was no different than having a judge determine the issues and observed the proposed arbitrators were former superior court judges. The court also found the offer was valid because the proposed general release did not suggest releasing matters other than those at issue in the litigation. The court did not abuse its discretion in making these findings.

First, the timing of the offer to compromise did not render it invalid. Chamblee had ample opportunity to evaluate her own claim prior to filing her action and she countered IBHS's offer with her own demand only a few days later stating the IBHS had ample time to evaluate her claim. In enacting section 998, "the Legislature did not impose any minimum period that must elapse following commencement of a suit for service of a valid section 998 offer." (Barba v. Perez (2008) 166 Cal.App.4th 444, 452.)

Second, the provision permitting an arbitrator to determine costs and attorney fees did not render the offer invalid due to uncertainty. (Elite Show Services, Inc. v. Staffpro, Inc. (2004) 119 Cal.App.4th 263, 269-270 [inclusion of a procedure for determining reasonable attorney fees and costs does not render an offer unenforceable].) The offer stated, "Application for costs/attorneys' fees shall be submitted to binding arbitration before one of the following Neutral Third Parties: [list of proposed arbitrators], with [Chamblee] to select which of these three shall act as Arbitrator . . . [Chamblee's] application for costs/attorneys' fees is subject to Motion to Tax and/or otherwise open to challenge as to their lawfulness and/or reasonableness." We do not read the entirety of the provision as allowing a unilateral challenge to arbitration. Rather, as the court determined, the proposed procedure is similar to what would occur in the trial court if the offer was silent on the issue of costs and fees. (Engle v. Copenbarger & Copenbarger, LLP (2007) 157 Cal.App.4th 165, 168 ["Where a section 998 offer is silent on costs and fees, the prevailing party is entitled to costs and, if authorized by statute or contract, fees"].) Chamblee would submit an application for attorney fees and costs and IBHS could submit a motion to tax or otherwise challenge the lawfulness or reasonableness of the Chamblee's request. The only difference is an arbitrator would make a binding decision instead of the trial court.

Third, the provision requiring execution of a general release did not render the offer invalid. The offer was for "full settlement of all claims being prosecuted by [Chamblee]" and contemplated a general release by Chamblee of her claims against IBHS and its affiliates related solely to that action. In a case such as this where only one claim is at issue, there is no ambiguity and "`a general release can be part of a valid section 998 offer.'" (Calvo Fisher & Jacob LLP v. Lujan (2015) 234 Cal.App.4th 608, 630.)

DISPOSITION

The orders are affirmed. IBHS shall recover its costs on appeal.

HALLER, J. and IRION, J., concurs.