Agarwal v. Johnson

• Decision Date: 07 December 1979
• Docket Number: S.F. 23890
• Citation: 25 Cal.3d 932,160 Cal.Rptr. 141,603 P.2d 58
• Parties: , 603 P.2d 58 Anand P. AGARWAL, Plaintiff and Respondent, v. Leonard W. JOHNSON et al., Defendants and Appellants.
• Court: California Supreme Court

Page 141

160 Cal.Rptr. 141

25 Cal.3d 932, 603 P.2d 58

Anand P. AGARWAL, Plaintiff and Respondent, v. Leonard W. JOHNSON et al., Defendants and Appellants.

S.F. 23890.

Supreme Court of California, In Bank.

Dec. 7, 1979.

Edwin L. Currey, Jr., Shand S. Stephens, Gilmore F. Diekmann, Jr., and Bronson, Bronson & McKinnon, San Francisco, for defendants and appellants.

Franklin J. Flocks, John J. Pico and Pico & Parks, San Mateo, for plaintiff and respondent.

MOSK, Justice.

We granted a hearing in this case for the purpose of considering whether certain jury instructions on respondeat superior and damages for intentional infliction of emotional distress were prejudicially erroneous. After reviewing the record, we conclude that the opinion by Presiding Justice Taylor for the Court of Appeal in all other respects correctly treats and disposes of the issues involved; that the judgment of the trial court should be affirmed; and that with certain changes, the opinion of the Court of Appeal is adopted as the opinion of this court. The opinion, with appropriate deletions and additions, follows: ^*

Defendants, Leonard W. Johnson (Johnson), Max French (French), and Arthur G McKee & Company (McKee), appeal from a judgment entered on a jury verdict in favor of plaintiff, Anand P. Agarwal (Agarwal), in his action for compensatory and punitive damages for defamation and intentional infliction of emotional distress. The major contentions on appeal concern the sufficiency of the evidence of malice and intentional infliction of emotional distress, and the correctness of the jury instructions on an employer's liability for intentional torts of his employees and the proper measure of damages for intentional infliction of emotional distress. For the reasons set forth below, ( ) (the judgment is affirmed.)

Viewing the record most strongly in favor of the judgment, as we must, the following pertinent chronology of facts appears: In May 1969, Agarwal, a native of East India, received his masters degree summa cum laude in systems engineering from West Coast University, which was then rated No. 1 in this field. He was one of three students graduating with distinction in a class of 82. He accepted an offer for employment from McKee in its San Francisco office rather than one from Lockheed because of the management status and potential. His title with McKee was that of scheduling engineer and his beginning salary was $1,000 per month.

McKee is an international corporation with headquarters in Cleveland, primarily engaged in the design and construction of mineral processing plants in the multi-million dollar range. McKee had about 5,000 employees; in 1976, its net income was $5,454,000. At the time here pertinent, Johnson was the manager of project services, which was comprised of 20-25 employees in three departments, estimating, cost control and scheduling. French was Johnson's assistant and the supervisor of the cost control department that gathered information on the status of McKee's various projects and assembled engineering costs reports. Regh was McKee's personnel manager and Aufmuth was a senior vice president and division manager in charge of 200-300 employees; Argenbright was Aufmuth's assistant.

During the 16-month period of his employment, Agarwal worked primarily for Johnson on a variety of assignments, including: development and implementation of variable budgets for project services; implementation of computerized personnel information systems; preparation of computerized schedules on several projects; preparation of manpower forecasts; preparation of computerized concrete estimating data and preparation of engineering progress reports. He also designed a sophisticated comprehensive computerized system for costs control and scheduling that had a potential projected annual savings of $70,000 to $80,000. Agarwal performed all these assignments in a competent manner. Agarwal was never told by anyone that any aspect of his work was unsatisfactory or that he had any problems in working or cooperating with other employees. Both Johnson and French admitted that Agarwal's work on specified projects was good and that he had not been criticized until the last two days of his employment.

In January 1970, when Agarwal received a $50 a month merit increase, Johnson indicated that Agarwal had been doing a good job. McKee's policy required annual performance reviews by the immediate supervisor and one other person familiar with the employee's work. Agarwal had a single performance review conducted by Johnson and French in June 1970. He received the lowest possible rating of "marginal" on this review, but was never informed of this fact, given any suggestions for improvement or given any field assignments to train him in certain practical aspects of McKee's work with which he was not familiar.

Beginning in September 1969, Agarwal became aware of certain instances of neglect or unfairness in the manner in which he was treated by Johnson. For example, at a department meeting in September 1969, Johnson presented an organization chart on which Agarwal was shown at a lower level and responsible to L. Thomas, who did very different work and received a significantly lower salary than Agarwal. Agarwal never worked under Thomas, who had far less education, and had frequently checked and overseen Thomas' work. Agarwal worked well with Thomas. At the time Agarwal came to work for McKee, Johnson told him that he was a superior to Thomas. When Agarwal called this error in the organization chart to Johnson's attention after the September 1969 meeting, Johnson indicated that it was an error and told him not to worry about it. Thomas did more work on specific contracts and was given the opportunity to log 510 hours of overtime in a period when Agarwal was allowed only 2.

Subsequently, in October 1969, Johnson moved Agarwal out of the office that Agarwal had been sharing with Thomas. Johnson stated to Agarwal that he was being moved because Thomas needed more space. Johnson indicated that, in fact, the move was the result of personality problems between Agarwal and Thomas' annoyance at some of Agarwal's personal habits; however, these matters likewise were never mentioned to Agarwal. The smaller office into which Agarwal was moved had a lighting fixture without a shade which made it difficult for Agarwal to work. He mentioned this matter to Johnson, but Johnson did nothing about it. Agarwal subsequently found a broken shade lining and put it on the fixture, but someone kept removing it. Several months later, after R. Geronim was moved into the office with Agarwal, there were no more problems with the light fixture.

Agarwal had been unsuccessful in obtaining an appointment with Johnson for a period of three or four months. Accordingly, in June 1970, Agarwal wrote a memo to Johnson requesting an opportunity to discuss the computerized system for scheduling and cost control that he had been developing. Johnson refused to give him any time, but told him to consult with Scully, the person in charge of McKee's computer department. Scully had a positive response to Agarwal's program. In July 1970, Agarwal orally asked Johnson for permission to attend a computer application seminar sponsored by the University of California on August 28, 1970. Johnson responded that the seminar appeared an interesting and appropriate one for Agarwal to attend and that permission would be granted in response to a written request. Agarwal then wrote a detailed request, but was denied permission to attend, without explanation.

On the afternoon of Wednesday, September 16, 1970, Johnson assigned Agarwal to work directly under French for the purpose of completing the computerization of a cost progress report. Agarwal received a memorandum on the matter from Johnson as well as one from French, which indicated that Agarwal was also to work in cooperation with the computer department and to be available full time for this project. French's memo indicated a previously established goal of getting most of the reports computerized by the end of the year. Agarwal accepted the new assignment in a memo to Johnson, with a copy to French which indicated that in some areas, he understood he would still be directly responsible to Johnson. Agarwal immediately began to work on the computerizing of the cost control report. Although this project required the use of a computer language with which Agarwal was not familiar, he was capable of handling the matter, as he had extensive background in other computer languages.

The following morning, September 17, 1970, Johnson asked Agarwal to check for errors in the time sheets of some employees. After going through the time sheets and making the necessary corrections, Agarwal returned the time sheets to Johnson. Johnson then told Agarwal to give the time sheets to French. Agarwal did so and was asked by French to take the time sheets around to each of the individual employees to obtain approval of the changes. Agarwal indicated that he had no objection to doing so, but suggested that it would be more efficient to send a secretary around to perform this task because he was in the middle of making the report that he had been assigned. French became outraged and said: "You black nigger, member of an inferior race, get out and do it." Agarwal exercised great self control, asked French to watch his words, but French proudly repeated the above statement. ¹ Agarwal then delivered the time sheets to all of the individual employees and returned them to French at 10:15 a. m.

Agarwal then finished the cost progress report that he had been assigned and gave it to the department secretary to type so that it could be sent to French. During the lunch hour, he noticed that the secretary, instead of typing his handwritten report, was copying it on the xerox machine. When he inquired as to why she was not typing it, she indicated that French had...