Montage Health gets a new trial in a wrongful termination case, but there could be a catch.

In May 2023, Community Hospital of the Monterey Peninsula and parent company Montage Health were on the losing side of a nearly $10 million lawsuit in Monterey County Superior Court, brought by a former employee contending he was terminated in retaliation for bringing up patient safety and billing issues at Tyler Heart Clinic. A jury agreed, and in a subsequent bench trial, Monterey County Superior Court Judge Vanessa Vallarta ruled CHOMP and Montage violated California’s health care whistleblower statute.

Two months later, Montage asked Vallarta to overturn the jury verdict in Jared Stiver v. CHOMP et al, but she denied the motion, noting the jury’s “thumping verdict.” Vallarta did partially grant Montage’s motion for a new trial to determine Stiver’s employment relationship with Montage.

Both Stiver and Montage appealed. On March 17, the Sixth District California Court of Appeal issued its ruling that Montage is entitled to a new trial on the limited point of Stiver’s employment with Montage.

It could be a case of be careful what you ask for: The judges also noted there was evidence that supports the initial jury decision against the company, putting a future win in doubt.

“Substantial evidence supports the jury’s finding that an agent or employee of Montage engaged in adverse employment actions with malice, oppression, or fraud and one or more officers, directors or managing agents ratified the conduct,” the judges stated.

They also affirmed Vallarta’s ruling that CHOMP and Montage violated the health and safety code by retaliating against Stiver.

Mindy Maschmeyer, Montage Health’s director of marketing and communications, said in a written statement that Montage agrees with the appellate judges that mistakes were made at trial and said the company will move forward with a new trial.

“We intend to prove, at trial, that Montage did not engage in any wrongful conduct in making the decision to end Mr. Stiver’s employment,” she said.

Mark O’Connor, Stiver’s attorney, says the court decision is only focused on a narrow issue.

“The new trial is limited to the employment relationships between Montage and Stiver. All other findings, including the malicious and suppressive conduct by Montage officers, remain intact,” O’Connor says.

In the first trial, Montage’s lawyers argued that Montage officers did not control CHOMP’s day-to-day activities and that those officers were wearing “subsidiary hats,” not “parent hats,” when making decisions about Stiver’s employment.

The appellate judges were not swayed, concluding that the evidence supported that Stiver’s day-to-day duties, suspension and termination ultimately “rested with Montage.”

In its appeal, Montage contended that there was insufficient evidence to support the jury’s $9.475 million verdict, as well as Vallarta’s ruling that Montage violated the whistleblower statute. The court rejected those claims.