O'Hara v. Teamsters Union Local No. 856
| Decision Date | 27 July 1998 |
| Docket Number | Nos. 97-15418,97-16145,s. 97-15418 |
| Citation | 151 F.3d 1152 |
| Parties | 158 L.R.R.M. (BNA) 2908, 135 Lab.Cas. P 10,207, 98 Cal. Daily Op. Serv. 5777, 98 Daily Journal D.A.R. 8048 Helen O'HARA, Plaintiff, v. TEAMSTERS UNION LOCAL # 856, an unincorporated labor organization; Bento Leal, Secretary-Treasurer of Teamsters Local 856, and Catherine Leal, individually and as an Officer of Local 856, Defendants. Bento LEAL and Catherine Leal, Cross-Claimants-Appellees, v. TEAMSTERS UNION LOCAL # 856, Cross-Defendant-Appellant. TEAMSTERS UNION LOCAL # 856, Cross-Claimant-Appellant, v. Bento LEAL and Catherine Leal, Cross-Defendants-Appellees. Helen O'HARA, Plaintiff, v. TEAMSTERS UNION LOCAL # 856, an unincorporated labor organization, Defendant-Cross-Defendant- Cross-Claimant-Appellant, v. Bento LEAL, individually and as Secretary-Treasurer of Teamsters Local 856; Catherine Leal, individually and as an Officer of Local 856, Defendants-Cross-Defendants- Cross-Claimants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
David A. Rosenfeld, Stanley S. Mallison, Van Bourg, Weinberg, Roger & Rosenfeld, Oakland, California, for defendant-cross-claimant-appellant.
Lee Ann Huntington, Lewis D. Barr, Morgenstein & Jubelirer, San Francisco, California, for defendants-cross-claimants-appellees.
Appeals from the United States District Court for the Northern District of California; Fern M. Smith, District Judge, Presiding. D.C. No. CV-92-01262-FMS.
Before: SNEED and TROTT, Circuit Judges, and WALLACH, * Judge.
Teamsters Local 856 appeals the district court's summary judgment in favor of former union officials Bento and Catherine Leal in the Leal's action for indemnification arising out of an underlying age discrimination/wrongful termination action brought by former union employee Helen O'Hara against the union and the Leals. We affirm.
Helen O'Hara ("O'Hara") began working as a bookkeeper in San Francisco for Teamsters Local 856 ("union") in 1989. At that time, Bento Leal was the union Secretary/Treasurer and Chief Executive Officer. Leal's daughter, Catherine Leal, was the union's Office Coordinator and O'Hara's immediate supervisor.
In October 1990, O'Hara met with court-appointed federal agents who were investigating Teamster locals pursuant to a settlement agreement between the national union and the United States, entered into in the Southern District of New York. United States v. Int'l Bhd. of Teamsters, 708 F.Supp. 1388 (S.D.N.Y.1989). O'Hara met with the agents a second time in February 1991. O'Hara allegedly told investigators that Catherine Leal had forced her to sign an attendance sheet for a union meeting she did not attend, that O'Hara had been denied vacation pay, that Catherine Leal had received extra vacation time, and that O'Hara had been coerced into making contributions to the union.
Soon after the first meeting with investigators, O'Hara alleges that the Leals began to harass her. She claims that the Leals falsely accused her of improperly removing several weeks of Catherine Leal's vacation time from union records and of being disloyal. O'Hara also claims that the Leals began to transfer O'Hara's duties to other employees, and instructed her to keep her office door open at all times and to spend no time at the local office other than working hours. O'Hara claims she believed the Leals were harassing her because she was providing evidence of their wrongdoing to federal investigators.
The Leals deny they harassed O'Hara, instead claiming she was a problem employee. They claim she was "counseled" on several occasions, and present evidence of at least one warning meeting and disciplinary letter in September 1990. The Leals claim O'Hara failed to keep up with her basic clerical duties and made long personal telephone calls during office hours. Others, including Michael McLaughlin ("McLaughlin"), the union member who later replaced Ben Leal as union Secretary/Treasurer, also complained about O'Hara. Ben Leal claims that the numerous problems eventually forced him to fire O'Hara in early April, 1991.
On April 1, 1992, O'Hara filed a lawsuit in the Northern District of California against the Leals and the union, alleging violations of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. §§ 411 and 529, (sections which protect a union member's right to freely express his or her views without fear of discipline from the union); breach of the union's bylaws; tortious discharge in violation of public policy; age discrimination; violation of the covenant of good faith and fair dealing; and emotional distress. After the O'Hara suit was filed, the Leals retained the union's lawyer. This lawyer represented both the Leals and the union in the pretrial proceedings and preliminary settlement negotiations with O'Hara that took place over a year and a half period Ben Leal was voted out of office during union elections in December 1993. At that time, the new Secretary/Treasurer, McLaughlin, fired Catherine Leal and immediately took charge of the O'Hara lawsuit. McLaughlin claims he believed that the Leals had harassed O'Hara, and that she was fired for whistleblowing activities. McLaughlin claims that he feared that he would violate his fiduciary duty to the union under federal law if he continued to allow the union to pay for the Leals' defense. Therefore, after discussions with the union's lawyer (a meeting held prior to McLaughlin's swearing-in as the local's leader), it was decided that the lawyer who had represented both the Leals and the union up to this point would withdraw. The union hired a new attorney to represent the union exclusively, leaving the Leals without union-paid representation.
following the filing. The union filed an answer that denied any wrongdoing by the Leals, and in July 1993 filed a motion for summary judgment, claiming that O'Hara was fired for reasons wholly unrelated to her meetings with federal investigators and again denying all accusations of illegality or wrongdoing. The same month, the district court granted the union's motion for summary judgment in part and dismissed some of O'Hara's claims while denying summary judgment on others.
Concurrent with these events, the union filed a suit against their two insurance companies on behalf of the union and the Leals, seeking to obtain payment on policies that could be used to defend or settle the O'Hara claims. The lawsuit was financed exclusively by the union. As part of the suit, the union asserted that the Leals had acted "within the scope of (their) employment" with regard to O'Hara, and thus were covered under the terms of the insurance policies. The union settled with the insurance companies in late 1994. Each company contributed $15,000 for purposes of settling the O'Hara suit.
In April 1995, all parties reached a settlement in the O'Hara case. O'Hara agreed to dismissal of all her claims, with prejudice, and neither the Leals nor the union admitted any wrongdoing.
Just prior to the O'Hara settlement, the Leals filed a demand with the union for indemnification of their costs incurred in defending against the O'Hara suit. When this request was refused (still prior to the finalization of the O'Hara settlement), the Leals filed a cross-claim against the union for indemnification. The union responded with a cross-claim of its own, seeking indemnification from the Leals for expenses incurred in defending and settling the O'Hara claims. The union claimed it was entitled to indemnity (and owed nothing to the Leals) because the Leals' actions regarding O'Hara had been illegal.
In early December, 1994, the district court granted Catherine Leal's motion for summary judgment on her cross-claim for indemnity, citing California Labor Code § 2802 and awarding her expenses and attorney's fees incurred in defending and settling the O'Hara suit. Catherine Leal then filed a motion seeking to obtain fees and expenses incurred in enforcing her § 2802 cross-claim against the union. The district court referred her motion to a magistrate judge, who held hearings and received briefs on the issue. After considering the magistrate's report the district court awarded Catherine Leal attorney's fees and expenses incurred in both the O'Hara action and the cross-claim against the union for indemnity. The district court also dismissed the union's claim for indemnity and later granted Ben Leal's motion for summary judgment on his claim for indemnity under § 2802, awarding him the fees and expenses incurred both on the O'Hara claim and in enforcing his indemnity claim against the union. Finally, in April 1997, the district court awarded the Leals fees incurred in defending against the union's cross-claim.
In the course of these proceedings, the district court held that the union was judicially estopped from attempting to escape indemnity by claiming the Leals had acted illegally when the union had previously claimed, for purposes of the suit against the insurance companies, that the Leals had acted "within the scope of employment." The court also rejected the union's claim that fees and expenses incurred in enforcing a right to We find that while the district court may have erred in holding that the union is judicially estopped, the union's opposition to the Leals' indemnity claim is nevertheless without merit because O'Hara's claims against the Leals were "unfounded" as a matter of law. In addition, we find that the union's cross-claim for indemnity is barred by the clear language of the relevant California statute.
indemnity under Cal. Labor Code § 2802 and defending the union's cross-claim for indemnity were unrecoverable. In addition, the district court rejected the union's claim that Cal. Labor Code § 2802, upon which all the indemnification awards were based, is preempted by federal law. This timely appeal ensued.
Moreover, we agree with ...
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