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Court of Appeal, Fourth District, Division 3, California.

Dennis E. CAREY et al., Plaintiffs and Appellants, v. INDUSTRIAL INDEMNITY et al., Defendants and Respondents.

No. G014960.

Decided: August 27, 1996

Edward P. Laufer, Alpine, for Plaintiffs and Appellants. Bolling, Walter & Gawthrop, Farmer & Murphy and George E. Murphy, Rancho Cordova, for Defendants and Respondents.


Roberta Carey and her husband Dennis Carey (the Careys) appeal from a judgment dismissing their first amended complaint against Industrial Indemnity,1 Roberta's former employers' workers' compensation insurance carrier. The Careys contend the court erred in sustaining Industrial's demurrer without leave to amend, imposing sanctions against their attorney, and thereafter denying their motions to set aside and/or reconsider its prior rulings.


In October 1986, Roberta resigned from her position as a loan officer at Coast Bank, admitting herself to a psychiatric facility for a 10-day suicide watch. She was diagnosed as suffering from migraine headaches, traumatic stress disorder, obsessive compulsive disorder, panic attacks and anxiety. On February 5, 1988, the Workers' Compensation Appeals Board (WCAB) determined Roberta's psychological injuries arose out of and occurred in the course of her employment, finding Industrial responsible for her disability payments and related medical expenses.

All did not proceed as ordered. On March 10, 1993, the Careys filed the underlying complaint alleging Industrial's “sporadic, arbitrary and capricious” payments constituted breach of contract, breach of the duty of good faith and fair dealing, fraud and deceit, and intentional and negligent infliction of emotional distress.2 Roberta claimed Industrial's “deceitful, arbitrary and intentional acts of wrongfully withholding payments” caused her to once again attempt suicide. Dennis alleged he “suffered extreme emotional distress as the result of [Industrial's][] conduct [] and [from] being a first hand witness to the mental destruction of his wife Roberta.”

Industrial demurred, arguing the Careys' causes of action were barred by the worker's compensation exclusive remedy rule. It also sought Code of Civil Procedure section 128.53 sanctions. The Careys filed a first amended complaint and Industrial took its demurrer and motion for sanctions off calendar. However, one month later Industrial filed another demurrer, this time claiming the two complaints were identical but for the addition of a medical malpractice cause of action alleged against Roberta's private physician. Once again Industrial sought sanctions.

The Careys failed to either file opposition or appear at the hearing. The court sustained the demurrer without leave to amend, finding “the complaint and the first amended complaint were entirely frivolous and without any merit, calculated solely to harass defendants and [made] in bad faith. Despite efforts by defendants to compromise the dispute, plaintiffs' attorney refused. Further, the failure of plaintiffs through their attorney, Edward P. Laufer, to file written opposition to the demurrer and motion for sanctions further evidences the lack of good faith belief in the merits of the case.” On these grounds, the court also granted sanctions, ordering Laufer to pay $5,045.

The Careys moved for reconsideration of the court's rulings (§ 1008), claiming their attorney mailed a second amended complaint to the court five days before the hearing. They also alleged Laufer called the court's clerk the morning of the hearing, asking her to tell the judge a response to the demurrer had been filed in the form of an amended complaint which they believed rendered the demurrer moot. In the alternative, they moved to have the order sustaining the demurrer set aside and for leave to file an amended complaint (§ 473). Industrial opposed the motions and requested further sanctions pursuant to section 128.5. On August 25, 1993, the court entered judgment in favor of Industrial. One month later it denied the Careys' motion for reconsideration/section 473 relief and Industrial's request for further sanctions, stating in its order, “Plaintiffs failed to meet the statutory requirements for reconsideration under section 1008 ․ because plaintiffs made no showing of ‘new or different facts, circumstances, or law ․’ as required by that statute. Likewise, with respect to the motion made pursuant to section 473 ․ plaintiffs failed to make an adequate showing of ‘mistake, inadvertence, surprise or excusable neglect ․” as required by that statute. [[[[¶] The court's previous orders sustaining the demurrer without leave to amend ․ and imposing sanctions ․ remain in full force and effect. Defendants' request for sanctions ․ is denied.”


The Careys acknowledge a motion to reconsider a prior order must include an affidavit stating “new or different facts, circumstances or law” (§ 1008) and give “a satisfactory explanation for the failure to produce that evidence at an earlier time. [Citation.]” (Blue Mountain Development Co. v. Carville (1982) 132 Cal.App.3d 1005, 1013.) They maintain they did this: Laufer attested he mailed a second amended complaint to the court before the hearing and informed the court's clerk it was the Careys' response to the demurrer. The court, however, based its ruling, inter alia, on its finding the Careys failed to file any opposition to the demurrer.4

As good as their argument sounds, it is fatally flawed. The Careys failed to seek leave of court to file their second amended complaint as mandated by section 473. And even if the complaint had been properly filed, the outcome is the same. The allegations made against Industrial are identical in both complaints.5 In short, the Careys cannot state a viable action at law against Industrial. “Although one may view an insurer's act of denying an undisputably valid claim as reprehensible, extensive case precedent flatly holds even an insurer's allegedly bad faith refusal to pay a workers' compensation claim is not conduct outside the exclusive remedy provisions of the workers' compensation system.” (Stoddard v. Western Employers Ins. Co. (1988) 200 Cal.App.3d 165, 172; see also Caplan v. Fireman's Fund Ins. Co. (1985) 175 Cal.App.3d 146, 148; Soto v. Royal Globe Ins. Co. (1986) 184 Cal.App.3d 420, 430 [family members of employee who did not receive timely payment of workers' compensation benefits cannot allege emotional distress].)


The Careys also appeal from the denial of their section 473 motion. While they claim “mistake, inadvertence, surprise or excusable neglect” (§ 473) they fail to designate the specific circumstance justifying relief. Even if we give them the benefit of the doubt and assume their ground for relief is mistake of law, i.e., their counsel's belief the demurrer could be forestalled by filing a second amended complaint without first obtaining leave of court, that would not help them. “Where, as here, the problem of law is a simple one and its solution readily ascertainable, the trial court does not abuse its discretion in finding the attorney's neglect inexcusable.” (Alvarado v. City of Port Hueneme (1982) 133 Cal.App.3d 695, 707; see Robbins v. Los Angeles Unified School Dist. (1992) 3 Cal.App.4th 313, 319.)6


The Careys' final contention, the trial court erred in imposing sanctions against their counsel, Edward P. Laufer, is equally without merit. We are without jurisdiction to consider this matter.7 Section 904.1, which defines the appealability of superior court orders and judgments, provides, “a superior court judgment directing payment of monetary sanctions by a party or an attorney for a party ․ may be reviewed on appeal by that party ․” (Italics added.) Thus, any right of appeal is vested solely in the sanctioned party, Laufer, not the Careys. (Imuta v. Nakano (1991) 233 Cal.App.3d 1570, 1585.) But, Laufer failed to include himself as an additional appellant in the Careys' notice of appeal. “Absent any attempted appeal by the sanctioned party the sanctioned ruling is not presently reviewable.” (Calhoun v. Valley City Unified School Dist. (1993) 20 Cal.App.4th 39.)8

The appeal of the trial court's order imposing sanctions against Laufer is dismissed. In all other respects the judgment is affirmed. Industrial shall recover its costs on appeal.9


1.  The complaint included allegations against Crum & Forster Organization and Xerox Financial Services Company. Judgment was entered in favor of each of them. The Careys however failed to make any specific allegations against them or establish their relationship with Industrial. On appeal, the Careys refer to Crum & Forster Organization, Xerox Financial Services Company and Industrial Indemnity as one entity.

2.  Roberta claims, without citation to the record, she made six WCAB appearances seeking enforcement of its order.

3.  All further statutory references are to the Code of Civil Procedure.

4.  This characterization of the Careys' contentions gives them far more credit than they deserve. Indeed, we also note the Careys devote the first seven pages of their opening brief describing the mistreatment (including sexual harassment) Roberta received from a prior employer, California Canadian Bank, for being a “whistle blower” about “illegal fraudulent loans.” Those allegations have nothing to do the workers' compensation claims raised in this case against Coast Bank's insurance carrier (Industrial). Moreover, in the last five pages of the statement of facts, their attorney departs completely from the record and starts rambling, (referring to himself in the first person), about why he thinks the complaint was well drafted. We refer appellants' counsel to California Rules of Court, rule 13.

5.  The Careys maintain the court must reconsider its ruling because they added a new viable medical malpractice cause of action to their second amended complaint. However this new claim was made only against a private practitioner, Dr. Joel Frank, who “at no time ․ [was] the employer, employee or agent of Industrial.” It has no bearing on the merits of Industrial's demurer.

6.  We recognize section 473 was amended to provide a plaintiff with mandatory relief from “any default judgment or dismissal” if he or she simply files a timely motion attesting to counsel's mistake, inadvertence, surprise or neglect. However, “when the Legislature incorporated dismissals into section 473 it intended to reach only those dismissals ․ which are procedurally equivalent to a default.” (Peltier v. McCloud River R.R. Co. (1995) 34 Cal.App.4th 1809, 1917.) Such is not the case here. The court sustained Industrial's demurrer without leave to amend and entered a judgment of dismissal based on its conclusion that as a matter of substantive law, workers' compensation was the Careys' exclusive remedy. The dismissal was not the procedural equivalent of a default.

7.  Although we requested the parties file supplemental briefing on this issue, counsel for the Careys failed to respond.

8.  We acknowledge in limited circumstances courts have “liberally construed the notice of appeal in favor of its sufficiency.” (Cal. Rules of Court, rule 1(a); see Moya v. Lanphear (1989) 208 Cal.App.3d 491, 497.) But here the notice of appeal states, “[T]he plaintiffs, Dennis E. Carey and Roberta (Hines) Carey, appeal[] from a final order, sustaining defendants' demurrer without leave to amend and judgment entered thereon, an order assessing damages against plaintiffs' attorney, (a non-party), an [ [ [ [d] a denial of the aforementioned parties, motion to vacate and motion for reconsideration.” (Italics added.) Laufer is clearly identified as a “non-party” to the appeal. (See Taylor v. Varga (1995) 37 Cal.App.4th 750, 761; Calhoun v. Vallejo City Unified School Dist., supra, 20 Cal.App.4th at p. 42.)

9.  Industrial failed to request sanctions in its brief. Instead it wrote a letter asking us to consider imposing sanctions on our own motion against the Careys or their counsel for filing a frivolous appeal. It noted it did not have time to file a separate motion requesting sanctions because California Rules of Court, rule 26(e) was adopted after the briefing was completed in this case. However, nothing precluded Industrial from requesting sanctions in its brief or via a supplemental brief, as required before the enactment of California Rules of Court, rule 26(e).

SONENSHINE, Associate Justice.

SILLS, P.J., and CROSBY, J., concur.

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