DeGrassi v. City of Glendora

• Decision Date: 20 March 2000
• Docket Number: N,No. 98-55802,98-55802
• Citation: 207 F.3d 636
• Parties: (9th Cir. 2000) CHRISTINE DEGRASSI,Plaintiff-Appellant, v. CITY OF GLENDORA, a Municipal corporation; ARTHUR COOK; PAUL BUTLER; SUE BAUER; MARSHALL MOUW; ALBERT FISHMAN; MOLLY A. MACLEOD; GARY W. ANDREWS; CONNIE ANDREWS; BETTY ANDREWS VAN VLIET, Defendants-Appellees. CHRISTINE DEGRASSI, Plaintiff-Appellant, v. CITY OF GLENDORA, a Municipal corporation; GARY W. ANDREWS; CONNIE ANDREWS; BETTY VAN VLIET; RONALD A. MORALES; ANDREWS MOLLY A. MACLEOD; ARTHUR COOK; PAUL BUTLER; SUE BAUER; MARSHALL MOUW; ALBERT FISHMAN; GARY AND LOWELL ANDREWS, INC., a corporation, dba ANDREWS, INC.; BURKE, WILLIAMS AND SORENSEN, OPINION Defendants-Appellees. o. 98-56228
• Court: U.S. Court of Appeals — Ninth Circuit

Page 636

207 F.3d 636 (9th Cir. 2000)

CHRISTINE DEGRASSI,Plaintiff-Appellant, v. CITY OF GLENDORA, a Municipal corporation; ARTHUR COOK; PAUL BUTLER; SUE BAUER; MARSHALL MOUW; ALBERT FISHMAN; MOLLY A. MACLEOD; GARY W. ANDREWS; CONNIE ANDREWS; BETTY ANDREWS VAN VLIET, Defendants-Appellees.

CHRISTINE DEGRASSI, Plaintiff-Appellant, v. CITY OF GLENDORA, a Municipal corporation; GARY W. ANDREWS; CONNIE ANDREWS; BETTY VAN VLIET; RONALD A. MORALES; ANDREWS MOLLY A. MACLEOD; ARTHUR COOK; PAUL BUTLER; SUE BAUER; MARSHALL MOUW; ALBERT FISHMAN; GARY AND LOWELL ANDREWS, INC., a corporation, dba ANDREWS, INC.; BURKE, WILLIAMS AND SORENSEN, OPINION Defendants-Appellees.

No. 98-55802, No. 98-56228

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted December 7, 1999

Filed March 20, 2000

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Robert L. Kern, Pomona, California, for the plaintiff-appellant.

Richard R. Terzian, LeBoeuf, Lamb, Greene & MacRae, Los Angeles, California, and Daniel P. Barer, Pollak, Vida & Fisher, Los Angeles, California, for the defendants-appellees.

Appeals from the United States District Court for the Central District of California; Stephen V. Wilson, District Judge, Presiding. D.C. No. CV-97-07973-SVW

Before: Melvin Brunetti and A. Wallace Tashima, Circuit Judges, and William W Schwarzer,^* Senior District Judge.

SCHWARZER, Senior District Judge:

Christine DeGrassi was a member of the Glendora City Council (the Council). She seeks indemnity for her attorney's fees from the City of Glendora (the City) under the California Tort Claims Act. She also seeks damages from various City officials and private parties for alleged civil rights violations under 42 U.S.C. S 1983. We must decide: 1) whether a city council member sued for statements made in the scope of her duties as a council member is entitled to an unconditional defense from the City under the California Tort Claims Act; and 2) whether the member's free speech rights under the First Amendment are infringed by her exclusion from council meetings called to discuss the member's request for a defense provided by the City.

FACTS

DeGrassi was elected to the Glendora City Council in 1994. She alleges that from the time of her election until 1997, the defendants--Council members, City officials, the private law firm representing the City, and plaintiffs in an action brought against her--subjected her to a campaign of harassment and intimidation because they opposed her political views. She claims that defendants barred her from participating in Council business, prevented her from communicating with City staff, and threatened her both physically and with litigation should she disclose the wrongdoing of any City employee. Much of the conduct complained of occurred as a result of DeGrassi's objection at a City Council meeting in 1996 to the granting of landmark status to a building in Glendora whose prior owner, she claimed, was a child molester. The owners of the building, the Andrews family, filed a slander action (the Andrews action) against her based on her comments at the City Council meeting. DeGrassi claims this action, which was eventually dismissed, was filed in retaliation for her political views.

DeGrassi sought to have the City provide her a defense against the Andrews action. On several occasions during October 1996, the City Council held closed sessions to consider DeGrassi's demand. DeGrassi was excluded from these meetings. She contends this conduct was part of a continuing campaign to interfere with her First Amendment rights and to destroy her political reputation and career; this conduct is the subject of DeGrassi's appeal from the district court's dismissal of her S 1983 claims (No. 98-56228). The City offered to provide DeGrassi with a defense subject to a reservation of rights and the condition that it control the litigation and potential settlement.¹ DeGrassi rejected the offer and retained counsel at her own expense. She now seeks reimbursement of her costs; this is the subject of her appeal from the district court's grant of summary judgment against her on her indemnity claim (No. 98-55802).

Subject matter jurisdiction exists under 28 U.S.C.SS 1331 and 1367. We have appellate jurisdiction pursuant to 28 U.S.C. S 1291, and we affirm.

DISCUSSION

I. THE INDEMNITY CLAIM

DeGrassi contends that the district court erred in holding that the City had complied with its statutory obligation to provide a defense, ruling that there was no genuine fact issue with respect to her claim for indemnification, and denying her an opportunity to conduct discovery. We review the district court's summary judgment ruling de novo. See Balint v. Carson City, 180 F.3d 1047, 1050 (9th Cir. 1999) (en banc). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. See id. We review the district court's ruling not to permit additional discovery pursuant to Federal Rule of Civil Procedure 56(f) for abuse of discretion. See Nidds v. Schindler Elevator Corp., 113 F.3d 912, 920 (9th Cir. 1996).

A. The City's Conditional Offer to Provide a Defense

DeGrassi contends that the district court erred in ruling that the City had complied with its obligation to provide her with a defense. She acknowledges that there is no California authority defining the limits of the ability of the City to control her defense but she argues that as a professional she should be entitled to approve or reject any settlement entered on her behalf.² DeGrassi cites a footnote in Robertson v. Chen, 52 Cal. Rptr. 2d 264 (Cal. Ct. App. 1996), stating that "[a]n exception to the general rule affording insurers the unconditional right to settle most third party claims without the insured's consent are the provisions in professional liability policies which `often give the insured the right to approve or reject any settlement negotiated by the insurer.' " Id. at 267 n.3 (citation omitted). Her reliance on this language is misplaced. DeGrassi's claim does not arise under the terms of a liability policy. Rather, it is controlled by the California Government Code, which defines the City's indemnity obligation.

Government Code section 995, which creates the obligation to defend a public employee, provides:

[U]pon request of an employee or former employee, a public entity shall provide for the defense of any civil action or proceeding brought against him, in his official or individual capacity or both, on account of an act or omission in the scope of his employment as an employee of the public entity.

Cal. Gov't Code Ann. S 995 (West 1995 & Supp. 2000). This obligation is limited by the public entity's right to refuse to provide a defense if it determines the employee did not act in the scope of employment, acted with actual fraud, corruption, or actual malice, or that defense of the action would create a conflict of interest between the public entity and the employee. See Cal. Gov't Code Ann. S 995.2(a) (West 1995 & Supp. 2000). The obligation to indemnify a public employee is found in section 825(a), which provides:

[I]f an employee or former employee of a public entity requests the public entity to defend him or her against any claim or action against him or her for an injury arising out of an act or omission occurring within the scope of his or her employment as an employee of the public entity and such request is made in writing not less than 10 days before the day of trial, and the employee or former employee reasonably cooperates in good faith in the defense of the claim or action, the public entity shall pay any judgment based thereon or any compromise or settlement of the claim or action to which the public entity has agreed.

Cal. Gov't Code Ann. S 825(a) (West 1995 & Supp. 2000) (emphasis added). Under this section, given a proper request by the employee and her good faith cooperation in the defense of a claim based on conduct occurring within the scope of employment, the City must indemnify the employee against any judgment or the cost of a settlement to which it has agreed. See id. This language leaves no room to argue that the employee must also agree to the settlement.

These provisions were adopted as a part of the California Tort Claims Act (Cal. Gov't Code SS 810-996) in response to the California Supreme Court's decision in Muskopf v. Corning Hosp. Dist., 359 P.2d 457 (Cal. 1961). That decision eliminated the defense of sovereign immunity in tort actions against the State and other public entities. See id. at 213-214, 11 Cal.Rptr. at 90, 359 P.2d at 458. In response, the Legislature adopted legislation to limit tort liability of public entities and of public employees."[A] principal purpose of the [California Tort Claims Act] centered on assuring the zealous execution of official duties by public employees." Johnson v. State, 447 P.2d 352, 359 (Cal. 1968). To that end, the Legislature provided a qualified right to indemnity.

The Legislature did not grant public employees the right to control a defense provided by a public entity. The statute by its terms grants the public entity authority to select an attorney by giving it the option to use its own attorney, hire outside counsel, or purchase insurance requiring the insurer to defend the employee. See Cal. Gov't Code Ann. S 996 (West 1995). It lodges control over settlement in the public entity by limiting the obligation to indemnify a public employee against settlements to those "to which the public entity has agreed." S 825(a). The statute also conditions the employee's rights on her "reasonabl[e] cooperat[ion] in good faith in the defense of the claim or action." Id. Failure to cooperate in good faith with the City's defense of the claim relieves the public entity of its obligation to indemnify the employee....