In Kim v. Konad USA Distribution, ___ Cal.App.4th ___ (June 12, 2014), the California Court of Appeal (Fourth Appellate District, Division Three) affirmed the judgment of the Orange County Superior Court (Judge Munoz) in favor of plaintiff on her employment-related claims, including those under the California Fair Employment and Housing Act.
Plaintiff was an Account Manager who claimed she was sexually harassed and retaliated against by defendant employer and one of its principals. These claims, ultimately, were ruled upon by the court after a bench trial on the merits. At the close of plaintiff’s case-in-chief, defendants moved orally for judgment pursuant to Code of Civil Procedure section 631.8. Defendants did not mention of a lack of jurisdiction or a failure to exhaust administrative remedies. The trial court ruled against defendants and then issued a proposed statement of decision and judgment in favor of plaintiff on her sexual harassment and wrongful termination claims. At this point, defendants – for the first time – objected on the grounds that the court lacked jurisdiction because plaintiff had failed to exhaust administrative remedies. The court overruled these objections and denied defendants’ subsequent motion to set aside and vacate the judgment pursuant to Code of Civil Procedure section 473(d). Defendants appealed.
The appellate court agreed with the trial court, finding that defendants waived their right to challenge the court’s jurisdiction until after the case was submitted for decision. The court noted that exhaustion as a jurisdictional prerequisite does not equate to subject matter jurisdiction, at least not in the context of administrative remedies. Moreover, the court noted that plaintiff did, in fact, submit evidence that she had exhausted her administrative remedies when she opposed defendants’ objections to the court’s proposed statement of decision and motion to set aside the judgment. Therefore, defendants’ argument that the trial court could not rely on this evidence was misplaced. “Defendants seek to have it both ways by claiming they can raise exhaustion at any time but the evidence of exhaustion should be limited to that submitted at trial. If it truly is a question of subject matter jurisdiction, the trial court could – and this court can – reasonably rely on the materials submitted by plaintiff in her opposition to defendants’ posttrial motion to decide the issue.”