SHOEMAKER v. MYERS

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Court of Appeal, Third District, California.

Jack SHOEMAKER, Plaintiff and Appellant, v. Beverlee A. MYERS, Individually and as Director, etc. et al., Defendants and Respondents.

C 000150.

Decided: June 12, 1987

Carroll, Burdick & McDonough and Gary M. Messing, San Francisco, for plaintiff and appellant. John K. Van de Kamp, Atty. Gen., Elizabeth C. Brandt and Joseph O. Egan, Deputy Attys. Gen., for defendants and respondents.

Plaintiff appeals from a judgment of dismissal entered after the trial court sustained defendants' demurrer to the third amended complaint without leave to amend.   The principal issue on appeal, which we address in the published part of this opinion, is whether the claims stated in the third amended complaint are barred by the exclusivity provisions of the workers' compensation law.  (Lab.Code, § 3601.)   We conclude they are.

In the unpublished part of this opinion, we address plaintiff's claim the trial court erroneously sustained defendants' demurrer to his second amended complaint without leave to amend as to his causes of action for violation of his civil rights (42 U.S.C. § 1983), injunctive relief and attorneys fees.   We conclude that only plaintiff's civil rights claim against the individual defendants has merit.1  Accordingly, we shall reverse that part of the judgment and affirm in all other respects.2

 On appeal after an order sustaining a general demurrer without leave to amend, we accept as true all material factual allegations in the complaint (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 151, fn. 1, 233 Cal.Rptr. 308, 729 P.2d 743;  Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496, 86 Cal.Rptr. 88, 468 P.2d 216.)

The complaint alleges as follows:  Plaintiff was a special investigator for the Department of Health Services (department) for 22 years.   On September 10, 1979, the Lieutenant Governor's office notified the Attorney General by letter that certain health care centers (centers) receiving state funds to provide family planning services were operating illegally because lay workers were performing services required to be performed by licensed medical professionals.   The letter indicated defendants Myers, Weiler and Koppes knew of the practice.   In September 1980, plaintiff was assigned to investigate the allegations.   His investigation led him to conclude defendant Myers may have committed misfeasance in office and possibly violated state and federal laws by approving funding for the centers.   He also concluded several members of the Department might have failed to act in the face of known violations of state law.   On October 10, 1980, plaintiff filed a written report of his findings and conclusions.   On October 24, 1980, plaintiff's supervisor reported the results of the investigation to defendant Shuttleworth, outlining potential illegal practices by the centers and possible misconduct by members of the Department.   Thereafter, Shuttleworth forbade plaintiff from contacting external law enforcement agencies or other appropriate authorities.   On November 3, 1980, Shuttleworth admonished plaintiff's supervisor for attempting to interview staff of the Lieutenant Governor's office about the centers.   On December 4, 1980, Shuttleworth informed plaintiff that defendants Dorfman and Reagan wanted plaintiff to refrain from further investigating the centers.   Plaintiff objected to the attempts to hamper the investigation and on December 8, 1980, asked to be relieved of further work on the matter.   On February 5, 1981, plaintiff received a memo from his supervisor chastising him for objecting to the obstruction of the investigation by Shuttleworth and other departmental officials.   Between December 1980 and May 1981, plaintiff was subjected to direct threats, intimidation and harassment from Shuttleworth and others within the management of the Department for his investigation and position on the issue of the centers.   In May 1981, a magazine article was published discussing the issue of the centers and defendant Myers' conduct in their funding.   Shuttleworth threatened to fire anyone responsible for the “leak” of information to the press or who had knowledge of it and failed to disclose it.   On November 4, 1981, Shuttleworth received a complaint in an unrelated matter accusing plaintiff of harassing a psychiatrist's patients.   Although plaintiff had been mistakenly identified as the offending party, Shuttleworth ordered him interrogated three times.   When plaintiff invoked his right to representation under the Peace Officers' Bill of Rights (Gov.Code, § 3300 et seq.), Shuttleworth fired him for insubordination.   This termination was in specific retaliation for plaintiff's efforts to pursue the investigation of the centers and for the exercise of his right to representation.   Plaintiff appealed the termination within the Department, but the decision was upheld.   Plaintiff appealed to the State Personnel Board.   Subsequent to the hearing, the State Personnel Board adopted the hearing officer's decision to revoke the termination and reinstate plaintiff.   After plaintiff was reinstated, defendant Reagan stated, “I would do it again if I had to” and, “If it had been anybody else but [plaintiff] we wouldn't be doing it.”   Shuttleworth stated he knew the termination would not be sustained but he “just wanted to cause [plaintiff] as much grief as possible.”   On March 25, 1982, plaintiff filed a claim with the Board of Control for damages arising from defendants' conduct.   The claim was rejected August 17, 1982.

Plaintiff filed his original complaint in superior court December 9, 1982.   Thereafter defendants stipulated plaintiff could file an amended complaint.   Plaintiff's first amended complaint was verified and set forth causes of action for tortious wrongful termination, wrongful termination in violation of former Government Code section 19683 (see fn. 4 post, at p. 692 of 237 Cal.Rptr., p. –––– of ––– P.2d), wrongful termination in violation of public policy, breach of contract and implied covenant of good faith and fair dealing, wrongful interference with business relationship, intentional infliction of emotional distress, fraud and deceit, violation of civil rights, injunctive relief and attorneys fees.   Plaintiff alleged defendants' wrongful and malicious acts caused him severe emotional and physical injuries “that ․ will result in some permanent disability to him.”   The trial court sustained defendants' demurrer with leave to amend, indicating with respect to the causes of action for wrongful termination and intentional infliction of emotional distress that a civil action is barred by the exclusivity provisions of the workers' compensation law because physical disability is compensable thereunder.

In a verified second amended complaint, plaintiff realleged the causes of action of the first amended complaint, but omitted the references to physical injury in all but the cause of action for violation of his civil rights.   The trial court sustained defendant's demurrer with leave to amend, advising plaintiff he could not delete allegations of physical injury from a verified complaint without adequate explanation.   The demurrer was sustained without leave to amend as to the causes of action for violation of civil rights, injunctive relief and attorneys fees.

In a verified third amended complaint, plaintiff realleged his causes of action for wrongful termination, breach of contract and implied covenant of good faith and fair dealing, wrongful interference with business relationship, and intentional infliction of emotional distress, again claiming only emotional injury.   In sustaining defendants' demurrer without leave to amend, the trial court stated plaintiff failed to explain the omission of physical injury allegations which had appeared in the verified first amended complaint, although admonished to do so;  therefore, the court considered those allegations and concluded the causes of action were barred by the exclusivity provisions of the workers' compensation law.   Judgment of dismissal was entered.

Plaintiff argues the trial court erroneously determined his causes of action are barred by the exclusivity provisions of the workers' compensation law.   He contends: (1) he should be allowed to rely upon his third amended complaint omitting the references to physical injury;  (2) even if a cognizable physical injury exists, defendants' intentional conduct gives rise to a civil action for damages;  and (3) former Government Code section 19683 allows a civil action despite the otherwise exclusive remedy of the workers' compensation law. We shall treat these arguments in turn.

I.

Workers' compensation is the exclusive remedy against an employer for injury or death of an employee if “the conditions of compensation exist.”   (Lab.Code, § 3601, subd. (a).) 3  A number of cases have recognized the exclusive remedy limitation is not applicable to situations involving only emotional distress.  (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d at p. 155–157, 233 Cal.Rptr. 308, 729 P.2d 743.) In Renteria v. County of Orange (1978) 82 Cal.App.3d 833, 838–842, 147 Cal.Rptr. 447, the court held an employee could maintain an action for intentional infliction of emotional distress against an employer where there was no physical disability.   The court reasoned emotional injury without any accompanying physical damage is not compensable under workers' compensation law, and unless an action at law is permitted, the employee will be left without any remedy for the intentional tortious conduct. (Renteria, supra, 82 Cal.App.3d 839–840, 147 Cal.Rptr. 447.)   The court concluded an employee's cause of action for intentional infliction of emotional distress is an implied exception to the exclusive remedy provisions of former Labor Code section 3601.  “ ‘If the essence of the tort, in law, is non-physical, and if the injuries are of the usual non-physical sort, with physical injuries being at most added to the list of injuries as makeweight, the suit should not be barred.   But if the essence of the action is recovery for physical injury or death, the action should be barred even if it can be cast in the form of a normally non-physical tort.’  (2A Larson, Workmen's Compensation Law § 68.34, pp. 13–31, 13–32.)”  (Renteria, supra, 82 Cal.App.3d at p. 842, 147 Cal.Rptr. 447.)

 If we were to look solely at plaintiff's third amended complaint, we could conclude Renteria 's implied exception to the Labor Code applies, and a civil action for damages is permissible.   However, in a prior verified complaint plaintiff alleged physical as well as emotional injury and permanent disability.   The rule is that material factual allegations in a verified complaint which are omitted in a subsequent amended pleading without adequate explanation will be considered by the court in ruling on a demurrer to the later pleading.  (Lamoreaux v. San Diego etc. Ry. Co. (1957) 48 Cal.2d 617, 623, 311 P.2d 1;  Callahan v. City and County of San Francisco (1967) 249 Cal.App.2d 696, 699, 57 Cal.Rptr. 639;  5 Witkin, Cal.Procedure (3d ed. 1985) Pleading, § 1117, pp. 533–534.)   The purpose of the rule is to prevent artful pleading where no cause of action can be stated truthfully.  (Callahan, supra, 249 Cal.App.2d at p. 699, 57 Cal.Rptr. 639.)   Since plaintiff failed in both his second and third amended complaints to explain the omission to reallege physical injury and disability, the trial court appropriately considered those allegations of his first amended complaint.

Plaintiff seeks to avoid this result by relying on McGee v. McNally (1981) 119 Cal.App.3d 891, 174 Cal.Rptr. 253.   McGee filed a complaint against his employers for intentional infliction of emotional distress, and the trial court sustained a demurrer to the original complaint without leave to amend based on the bar of the workers' compensation law.  (119 Cal.App.3d at p. 893, 174 Cal.Rptr. 253.)   The appellate court reversed on the rationale of Renteria, supra.   The court noted McGee's contentions included “oblique reference” to physical harm, but the essence of the complaint was for emotional injury with the physical injury allegations being mere makeweight.  (Id., at pp. 894, 895, 174 Cal.Rptr. 253.)   The court observed that the complaint fell short of stating a cause of action, but the demurrer should not have been sustained without leave to amend because the court could not say McGee would be unable to state a cause of action.  (Id., at p. 896, 174 Cal.Rptr. 253.)   Recognizing the rule against amending verified complaints without explanation, the court said it could conceive of a number of reasons why the “ ‘offending’ language regarding physical injury was included which would support its excision now without impugning the credibility of [McGee's] cause of action.”  (McGee, supra, at p. 897, 174 Cal.Rptr. 253.)   Physical injury was only “lightly traced” in the pleadings, and the obvious emphasis was on the emotional trauma.   Additionally, no physical disability cognizable under the workers' compensation law was alleged to have resulted from the injuries.  (Ibid.)

Relying upon McGee, plaintiff claims his first amended complaint only lightly mentioned physical injuries and always in conjunction with emotional injuries.   He argues the later omission of the physical injury allegations did little or nothing to alter the thrust of his complaint and exemplifies the makeweight nature of the allegations.   We find McGee distinguishable on two points.

First, unlike McGee, plaintiff's first amended complaint contains more than “oblique reference” to physical harm.  (Id., at pp. 894, 897, 174 Cal.Rptr. 253.)   Plaintiff alleged defendants' wrongful acts caused his physical and emotional health rapidly to decline;  he was unable to work “because of industrial, stress-related illness, intermittently, during the period of December 1980 through June 1981, and was totally disabed [sic ] from July 3, 1981 until his return to work on October 19, 1981;”  as a result of his illegal termination, his health was injured;  as a result of defendants' intentional obstruction of his work, he was “injured in his health, strength, and activity, sustaining bodily injuries and shock and injury to his nervous system”;  and defendants' conduct caused him to become emotionally distressed and physically ill with the likelihood it would result in permanent disability.   These allegations of physical injury and disability are not mere makeweight.

Second, in McGee, demurrer was sustained to the original complaint and the potential remained for the plaintiff to explain an amendment omitting allegations of physical injury in a later pleading.   Here, plaintiff had two occasions to explain his amendments, on the later of which he was aware the trial court required an explanation.   Plaintiff's failure to avail himself of these opportunities cannot be overlooked, and he is bound by the allegations of physical injury and disability in his first amended complaint.

II.

Plaintiff argues that even if he did suffer physical injury and disability, defendants' intentional misconduct permits a civil action for damages.   This argument was recently rejected in Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 233 Cal.Rptr. 308, 729 P.2d 743.   The plaintiff in Cole suffered total, permanent, mental and physical disability due to the intentional misconduct of his employer and a fellow employee.  (43 Cal.3d at p. 151, 233 Cal.Rptr. 308, 729 P.2d 743.)   He sued for intentional infliction of emotional distress, and the trial court sustained the defendants' demurrer without leave to amend on the ground the claims were within the exclusive province of workers' compensation.  (Ibid.)  In affirming, the Supreme Court observed that to permit a civil action in cases of intentional infliction of emotional distress causing disability where the employer acts with the express purpose of causing emotional distress would “throw open the doors to numerous claims already compensable under the [workers'] compensation law.   An employer's supervisory conduct is inherently ‘intentional.’   In order to properly manage its business, every employer must on occasion, review, criticize, demote, transfer and discipline employees.   Employers are necessarily aware that their employees will feel distressed by adverse personnel decisions, while employees may consider any such adverse action to be improper and outrageous.   Indeed it would be unusual for an employee not to suffer emotional distress as a result of an unfavorable decision by his employer.”  (Cole, supra, at p. 160, 233 Cal.Rptr. 308, 729 P.2d 743;  original emphasis.)   The court held that when the employer's misconduct is due to actions which are a normal part of the employment relationship, such as demotions, promotions, criticisms of work practices, and frictions in grievance negotiations, an employee suffering emotional distress causing disability may not avoid the exclusive remedy of workers' compensation.   (Ibid.)  It would be contrary to the compensation bargain and unfair to the employer to allow an employee to avoid the exclusive remedy provisions by characterizing conduct normally occurring in the workplace as unfair or outrageous.  (Ibid.)  The court went on to note the cases which have permitted recovery in tort involved conduct of an employer having a tenuous relationship to the employment, an injury not sustained while the employee was performing services incidental to the employment and which could not be considered a risk of the employment, or conduct where the employer or insurer stepped out of their proper roles.  (Cole, supra, 43 Cal.3d at p. 161, 233 Cal.Rptr. 308, 729 P.2d 743.)

 As in Cole, the allegations in this case regarding defendants' conduct involve matters which can be expected to occur in the work environment and are part of the normal employment risks.   Disciplinary hearings and actions, such as termination, are an inherent part of the employment setting.  (See Cole, supra, at pp. 160, 161, 233 Cal.Rptr. 308, 729 P.2d 743.)  “Some harassment by superiors when there is a clash of personality or values is not uncommon.”  (Cole, supra, at p. 161, 233 Cal.Rptr. 308, 729 P.2d 743.)   The intentional nature of defendants' misconduct does not alter this result nor does it avoid the exclusive remedy set forth in the Labor Code.

III.

Defendant's claim is based on former Government Code section 19683 which, he contends, allows a civil action for damages despite the exclusive remedy provisions of the workers' compensation law.   Section 19683 was a “whistleblower” statute prohibiting the use of official authority by any state officer or employee or any person whatsoever to discourage, restrain, interfere with, coerce or discriminate against any other state officer or employee who in good faith reports violations of any state or federal law on the job or directly related thereto.   Any person guilty of such wrongful conduct could be liable to the offended party in an action for civil damages.4

Plaintiff seizes upon the reference in section 19683 to “an action for civil damages,” to support his position.   He claims the apparent conflict between this statute and the exclusive remedy provisions of the Labor Code must be resolved under rules of statutory construction by giving precedence to section 19683 as the later enacted and more specific of the two statutes.

 We are not persuaded.   It is clear that section 19683 is applicable more broadly than only to those cases which are exclusively compensable under the Labor Code.   First, “an action for civil damages” as used in section 19683 encompasses damages not only for physical injury but for every conceivable kind of injury or loss sustained as a result of the conduct forbidden by the section.   In fact, that conduct would seem most naturally in the typical case to result in nonphysical injuries.   Thus the exclusive remedy provision of the workers' compensation law is the more specific of the two and would impact the remedy otherwise afforded by section 19683 in relatively few instances.   Second, although inartfully drawn, the statute is not limited to the employer-employee relationship.   Although it speaks to violations of law occurring on the job or directly related thereto, it prohibits the misuse of official authority by “any person whatsoever.”   Liability in civil damages of parties other than an employer or co-employee for injuries sustained on the job is not barred by the workers' compensation law.   (See Lab.Code, § 3852;  Lamoreux, supra, 48 Cal.2d at pp. 624–625, 311 P.2d 1.)   Where former section 19683 is violated by one not covered by the provisions of the workers' compensation law, the conditions of compensation have not been met, there is no conflict between remedies, and a civil action is allowable.  (See Lab.Code, § 3601.)   If, however, the conditions of compensation do exist, as for example in this case where physical injury is alleged to have occurred in the course of employment due to the employer's conduct, the conflict must be resolved in favor of the exclusivity provisions of the workers' compensation law.   The workers' compensation law is narrower than former section 19683 in respect both to the type of injury covered and the parties against whom relief may be had.   As the more specific of the two, it takes precedence over section 19683 where the nature of the injuries and the parties come within its scope.  (See, e.g., People v. Tanner (1979) 24 Cal.3d 514, 521, 156 Cal.Rptr. 450, 596 P.2d 328.)

The trial court properly sustained defendants' demurrer to the third amended complaint without leave to amend because plaintiff's causes of action are barred by the workers' compensation law.5

IV *

The judgment is reversed insofar as it dismisses plaintiff's section 1983 cause of action and the ancillary cause of action for attorneys fees against the individual defendants.   The trial court is directed to overrule the demurrer to the second amended complaint as to those causes of action.   In all other respects the judgment is affirmed.

FOOTNOTES

1.   The named defendants are the State, the Department of Health Services, and the following individuals in their departmental capacities:  Beverlee Myers as Director, Barry A. Dorfman as Assistant Director, Richard Koppes as attorney, Ted Scott as Executive Director, Philip G. Weiler as Chief Deputy Director of Preventive Health Services, Jack Reagan as Deputy Director of the Audits and Investigations Division, and Charles Shuttleworth as Chief of the Audits and Investigations Division.

2.   The Reporter of Decisions is directed to publish all of this opinion except Part IV.

3.   Labor Code section 3601 was amended in 1982.   The pre–1982 statute is applicable to this case because plaintiff's injuries were suffered prior the effective date of the 1982 legislation, and the amendments do not have retroactive application.  (Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d at p. 153, 233 Cal.Rptr. 308, 729 P.2d 743.)

4.   Former Government Code section 19683 provided in pertinent part:  “No state officer or employee nor any person whatsoever shall directly or indirectly use or threaten to use any official authority or influence in any manner whatsoever which tends to discourage, restrain, interfere with, coerce or discriminate against any other state officer or employee who in good faith reports, discloses, divulges, or otherwise brings to the attention of the Attorney General, or the Joint Legislative Audit Committee pursuant to Article 3 (commencing with Section 10540) of Chapter 4 of Part 2 of Division 2, or any other appropriate authority any facts or information relative to actual or suspected violation of any law of this state or the United States occurring on the job or directly related thereto.   Any person guilty of such an act may be liable in an action for civil damages brought against him by the offended party.   Notwithstanding the provision of Section 19682, a violation of this section shall not be a misdemeanor.”Former Government Code section 19683 has been replaced by Government Code section 10548.  (Stats.1986, ch. 353, §§ 4–5.)

5.   Concerning the ruling on the demurrer to the third amended complaint, plaintiff also contends the trial court erroneously determined:  (1) the essence of the complaint was for malicious prosecution thereby invoking the immunity provisions of the Tort Claims Act (Gov.Code, §§ 815.2 and 821.6);  (2) plaintiff's claim filed with the State Board of Control was inadequate and untimely;  (3) the cause of action for breach of contract was uncertain;  and (4) the cause of action for wrongful interference with business relationship failed to state facts sufficient to constitute a cause of action.   Due to our resolution of the adequacy of the complaint on other grounds, we need not address plaintiff's other claims of error.

FOOTNOTE.   See footnote 2, ante.

PUGLIA, Presiding Justice.

CARR and DEEGAN,** JJ., concur.

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