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Klune v. Palo Verde Health Care District (2019)

January 22, 2019

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The plaintiff, Peter Klune, was terminated as CEO of Palo Verde Hospital in Blythe, California. Klune sued the Palo Verde Health Care District and several of its board members on a variety of legal theories, including breach of contract, violation of procedural due process, and whistleblower retaliation. Klune prevailed on his breach of contract claim, but the district court rejected Klune’s other claims after a multi-day bench trial. The district court then awarded Klune contractual attorney’s fees, but the court awarded much less in fees than Klune sought. The district court also declined to award prevailing party costs to Klune. Klune appealed to the Ninth Circuit.

After the appeal was briefed, the defendants retained Horvitz & Levy to present oral argument. The Ninth Circuit affirmed the judgment in all but one respect in an unpublished memorandum disposition. The Ninth Circuit rejected Klune’s constitutional claims as a matter of law, and it further concluded that the district court did not abuse its discretion in (1) imposing reasonable time limits at trial, (2) awarding Klune considerably less in attorney’s fee than he applied for, and (3) declining to award costs to Klune. The Ninth Circuit also concluded, however, that the district court miscalculated Klune’s breach of contract damages. The Ninth Circuit remanded to the district court with instructions to add an additional $36,350 to Klune’s contract damages.