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District Court of Appeal, Second District, Division 1, California.

Ross HARDY, Plaintiff and Appellant, v. James Leslie VIAL et al., Defendants and Respondents.*

Civ. 21376.

Decided: July 11, 1956

Desmond & Desmond, Walter Desmond, Jr., Long Beach, for appellant. Edmund G. Brown, Atty. Gen., Lee B. Stanton, Deputy Atty. Gen., for respondent.

The complaint herein, for malicious prosecution alleges, as stated in appellant's brief, ‘that seven named defendants were officers or employees of the State Department of Education or of Long Beach State College of said Department; that each of said defendants, for the purpose of getting plaintiff discharged from his position as professor at Long Beach State College, falsely, maliciously and without probable cause conspired to accuse him of gross immorality and unprofessional conduct in committing base, vile and depraved acts while employed as such professor; that defendants Vial, Pond and Egolf, in pursuance of said conspiracy and aided, advised and abetted by the other defendants, swore to affidavits falsely accusing plaintiff of committing such acts, and filed said affidavits with defendant Bryant, a dean of said college; that because of the alleged acts and the recommendation of defendant Peterson, the college president, plaintiff was dismissed by the State Director of Education, defendant Simpson; that after a hearing by the State Personnel Board it was unanimously found by said Board that the reasons for plaintiff's dismissal were not true, and he was restored to his position effective as of the date of his dismissal; that plaintiff suffered certain items of damage because of the aforesaid acts; and that defendants should be assessed exemplary damages because their actions were malicious'.

Following the sustaining of demurrers to the complaint, a First Amended Complaint was filed, making certain minor changes, and adding a reference to the State Personnel Board as being an ‘agency with adjudicatory powers conferred by Article XXIV, Section 3 of the California Constitution’, to which demurrers were sustained without leave to amend, and judgments of dismissal entered thereon.

It is appellant's contention that ‘This action for malicious prosecution is properly based upon proceedings before an administrative agency’, and that the State Personnel Board ‘is an agency with judicial powers that performs judicial functions which can serve as the basis for a malicious prosecution suit’. Appellant also urges that ‘The rule of immunity of public officials from civil liavility does not relieve respondents of their liability’; that the acts in question were done outside the scope of the officials' authority.

The appellant's brief, as well as that of rspondents, notes that there are three California decisions holding that a malicious prosecution action must be predicated upon a judicial proceeding and cannot be based upon an administrative proceeding. It is claimed, however, that these decisions have become outmoded because, as said in Melvin v. Pence, 76 U.S.App.D.C. 154, 130 F.2d 423, 426, 143 A.L.R. 149, 153, ‘Much of the jurisdiction formerly residing in the courts has been transferred to administrative tribunals', and that ‘The same harmuful consequences may flow from the groundless and malicious institution of proceedings in them as does from judicial proceedings similarly begun’. The Restatement of the Law of Torts, Volume 3, Section 680, containing similar statements, is likewise cited.

In Cosulich v. Stempel, 1927, 81 Cal.App. 278, 253 P. 344, it was held that a malicious prosecution action will not lie against one who maliciously, falsely and without probable cause, files with the Real Estate Commissioner an information under oath accusing an applicant for a broker's license of dishonesty and misconduct.

The Cosulich case was followed and cited with approval in Hayashida v. Kakimoto, 1933, 132 Cal.App. 743, 23 P.2d 311, where a complaint for malicious prosecution based upon defendants' alleged false statements, was held defective in failing to show that United States immigration authorities in detaining plaintiff as an alien, were acting in a judicial capacity or performing anything more than an administrative function.

Likewise, in Lorber v. Storrow, 1937, 22 Cal.App.2d 25, 70 P.2d 513, 514, citing the Hayashida opinion, it was held that the state real estate commissioner, in reference to the revocation of licenses, is not exercising quasi-judicial powers, and hence that such proceedings ‘lack a necessary element upon which to base these actions for malicious prosecution’.

As said in appellant's brief, ‘If the law were static the rule of these cases could just as validly be supported today,’ but it is also true, as appellant states, that ‘Since 1937 California has kept pace with the federal and other state governments in creating an administrative procedure system when none existed before’. It is this development, appellant argues, ‘that has outmoded these three California decisions'.

That administrative agencies are now handling many of the former functions of the courts cannot be denied. And from a laymen's viewpoint, at least, these agencies seem nothing less than judicial in nature, whatever they may be called. In many instances, as in the present case, the individual has no option and the controversy is required to be submitted to the commission or other agency. Yet, according to the respondents' contention, and the judgment appealed from, this litigant who is required to go to such agencies, has no action for malicious prosecution.

The appellant professor, who had been summarily discharged from a college position, had no recourse under the Education Code, Section 20393, other than to ask for a hearing before the State Personnel Board. At this hearing the serious charges against appellant were found to be untrue. ‘All this was accomplished’, as stated in appellant's brief, ‘under a system prescribed by statute which allows no recourse to courts until after the administrative remedies have been exhausted, and then only by the party against whom the decision of the State Personnel Board has been rendered. Appellant here was successful in getting a unanimous decision from that Board in his favor; and of course, took no steps to have the matter reviewed by a court’.

Citing Boren v. State Personnel Board, 1951, 37 Cal.2d 634, 639, 234 P.2d 981, the respondent avers that ‘The State Personnel Board does not exercise judicial power even though it is a constitutional body; but exercises only quasi-judicial powers'. This, however, seems no more than a play on words. Whatever the terminology, the fact remains that these socalled administrative agencies do render decisions of the utmost importance, on issues which were formerly determined by the courts. And, in the instant case, the complaint, as amended, expressly alleges that the Board is an ‘agency with adjudicatory powers conferred by Article XXIV, Section 3 of the California Constitution’.

As said by this court in the recent case of Griffith v. Department of Public Works, 141 Cal.App.2d 376, 296 P.2d 838, 842, ‘the only issue involved in a demurrer hearing * * * (is) whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action’. The rule is well established that the allegations of the complaint must be regarded as true; whether plaintiff will be able to satisfactorily establish the allegations is immaterial. The question is one of law only, and if the plaintiff has on any theory stated a cause of action, a trial on the factual issues is warranted.

The present complaint, like that in the Griffith case just cited, charges a conspiracy on the part of various officials; it sets out the various elements of malicious prosecution and alleges that as a result of such conduct plaintiff has been wrongfully deprived of a college professorship and damaged in reputation. As hereinbefore indicated, if the only objection to the complaint is that as a matter of law the State Personnel Board should not be considered a judicial body or one exercising similar powers, such objection, under the modern development of administrative procedure, cannot be deemed adequate ground for sustaining a demurrer without leave to amend.

The view just indicated is consistent with and follows the more modern rule set forth in the Restatement of the Law of Torts, Volume 3, Section 680, which is quoted in the annotation starting on page 157 of 143 A.L.R. following the case of Melvin v. Pence, supra, hereinbefore cited. The language of the Restatement is as follows: ‘One who initiates or procures the initiation of civil proceedings against another before an administrative board which has power to take action adversely affecting the legally protected interests of the other is subject to liability for any special harm caused thereby, if (a) the proceedings are initiated (i) without probable cause to believe that the charge or claim on which the proceedings are based is well founded, and (ii) primarily for a purpose other than that of securing appropriate action by the board, and (b) the proceedings have terminated in favor of the person against whom they are brought’.

The respondents' other principal objection to the complaint is based upon the rule of immunity of public officials from civil liability. In this connection, respondent's brief avers that ‘The pleadings on file herein show, and the Court took judicial notice of the fact that the ‘School Respondents' acted in their official capacities'; that such being the case, malicious prosecution will not lie, regardless of malice. Respondents also rely upon the presumption that the defendants, ‘as public officers, are presumed to have regularly and properly performed their duties'.

There can be no argument concerning the rule of non-liability of public officers, but such rule is predicated upon the proposition that the officials have acted within the scope of authority. The converse of this rule is equally important; namely, that if such individuals step outside and beyond the proper scope of official functions and duties, their official position affords no protection against civil liability.

In the instant case the question of the exact nature of the defendants' acts is one of the utmost importance, and one which should not be summarily disposed of on the hearing of a demurrer. It should also be borne in mind that not all of the defendants named occupy official positions, and it would seem that a conspiracy between officers and private individuals to secure the appellant's dismissal would hardly classify as one within the proper scope of official authority.

Respondents' statement that the pleadings show that ‘school respondents' acted in their official capacities, is not borne out by the record; all that the complaint does is to mention the official position of certain defendants. The fact that one occupies an official position and the question whether certain acts are within the scope of authority, are matters of a widely different nature, and the latter question is an important part of plaintiff's cause of action. Nor could a court rightly take judicial notice of whether the defendants' conduct in a particular case, came within the scope of official duty; such a question might easily require detailed and definite proof.

Nor is it important whether the complaint contains the precise allegation that defendants' acts were outside ‘the scope of authority’. At best, such would be in the nature of a statement of a conclusion. Regarding the allegations of the complaint as true, as must be done, and considering the complaint as a whole, it is clear that the defendants are charged with serious acts which may be actionable whether the defendants are officials or ordinary citizens. While it may well be that the complaint could be improved upon in certain particulars, its defects cannot be deemed fatal.

A liberal rule of pleading has always prevailed in this state and plaintiff should be accorded the benefit of such liberal policy. Obviously, such rule will apply whether the defendants are officials or individuals. The sustaining of a demurrer without leave to amend, and entry of judgment thereon, is a matter of the utmost importance, and unless a high degree of care be exercised by a trial court, such procedure may easily work irreparable damage by denying plaintiff the right to a plenary trial of the issues. Such appears to be the situation in the instant case. No substantial merit is found in any of respondents' contentions, and the complaint, as amended, cannot be deemed vulnerable on either general or special demurrer.

The judgment is reversed, with instructions to overrule the demurrers to the complaint, to allow respondents a reasonable time within which to file answers, and to proceed to a trial on the merits.

DORAN, Justice.

WHITE, P. J., and FOURT, J., concur.

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