Farmers Ins. Group v. County of Santa Clara, S041795

Decision Date06 December 1995
Docket NumberNo. S041795,S041795
Citation11 Cal.4th 992,47 Cal.Rptr.2d 478,906 P.2d 440
CourtCalifornia Supreme Court
Parties, 906 P.2d 440, 69 Fair Empl.Prac.Cas. (BNA) 1120, 11 IER Cases 1256, 95 Cal. Daily Op. Serv. 9298, 95 Daily Journal D.A.R. 16,145 FARMERS INSURANCE GROUP et al., Plaintiffs and Appellants, v. COUNTY OF SANTA CLARA et al., Defendants and Respondents
Carroll, Burdick & McDonough, Christopher D. Burdick, David M. Rice and Martin R. Gran, San Francisco, for Plaintiffs and Appellants

[11 Cal.4th 997] Silver, Shaeffer & Hadden, Lawrence J. Friedman, Santa Monica, Stephen H. Silver, Susan Silver, Santa Monica, Patricia A. Shiu, Christopher Ho, William C. McNeill, III, Joyce Tom, San Francisco, David B. Oppenheimer, Piedmont, Elizabeth Mohr, San Francisco, Elizabeth E. Bader, Joan Wolff, Deborah M. Hall, San Francisco, Benjamin C. Sybesma, Santa Ana, Joel H. Levinson, Susan Beecher Sandoval, Sacramento, Dawn M. Schock and Mary Ann Soden, Long Beach, as Amici Curiae, on behalf of Plaintiffs and Appellants.

Steven M. Woodside, County Counsel, Ann Miller Ravel, Chief Assistant County Counsel, James Rumble, Deputy County Counsel, Marron, Reid & Sheehy, Martin H. Dodd and Michael A. Futterman for Defendants and Respondents.

Thomas F. Casey III, County Counsel, San Mateo, Christine E. Motley, Deputy County Counsel, James E. Holst, John F. Lundberg, Christopher M. Patti, Oakland, Whitmore, Johnson & Bolanos, Richard S. Whitmore, Kathryn J. Burke, Nancy J. Clark, Mountain View, Hanson, Bridgett, Marcus, Vlahos & Rudy, Douglas H. Barton and Diane Marie O'Malley, San Francisco, as Amici Curiae on behalf of Defendants and Respondents.

BAXTER, Justice.

This case presents the issue whether, under the Tort Claims Act (Gov.Code, §§ 825-825.6, 995-996.6), the County of Santa Clara (the County) must indemnify one of its deputy sheriffs and pay his costs for defending against a sexual harassment lawsuit where the evidence is undisputed that the deputy sheriff lewdly propositioned and offensively touched other deputy sheriffs working at the county jail. We conclude the answer is no. Under the Tort Claims Act, a public entity is required to pay claims and defense costs arising out of a civil lawsuit only where the employee proves that the act or omission giving rise to an injury occurred in "the scope of his or her employment as an employee of the public entity." (Gov.Code, §§ 825, subd. (a), 825.2, subd. (b), 995; see Gov.Code, § 995.2.) Since the deliberate targeting of an individual employee by another employee for inappropriate touching and requests for sexual favors is not a risk that may fairly be regarded as typical of or broadly incidental to the operation of a county jail, such conduct must be deemed to fall outside the scope of a deputy sheriff's employment. Consequently, the County is not obligated to indemnify the sexual harasser or his private insurer. We therefore reverse the contrary judgment of the Court of Appeal, and remand the matter with directions to vacate the judgment and to enter judgment in favor of the County.

[11 Cal.4th 998]

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1980, the County promulgated a policy prohibiting sexual harassment in the workplace. At the time of the events underlying this action, the policy provided in pertinent part: "[S]exual harassment constitutes sex discrimination which is prohibited. [p] Sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when: [p] 1. Submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment; [p] 2. Submission to or rejection of such conduct by an individual is used or is threatened to be used as the basis for employment decisions affecting such individual, or; [p] 3. Such conduct has the purpose or effect of interfering with any individual's work performance or creating an intimidating, hostile, or offensive working environment." The Santa Clara County Sheriff's Department distributed this written policy to its employees and instructed them to study it. The policy was then discussed with employees.

In 1981, the County hired Cynthia Bates and Toni Daugherty as deputy sheriffs in the sheriff's department.

Between April 1983 and December 1983, Bates and Deputy Sheriff Craig Nelson worked in the North County jail. While there, Nelson made lewd, suggestive and sexually

[906 P.2d 445] offensive comments to Bates. He asked her about her sex life and made repeated comments about oral sex. Nelson also touched Bates on her legs and thighs

Between February and June 1984, Bates and Nelson worked in the main jail together. Nelson, who was Bates's "training officer" during this time, was responsible for evaluating Bates's progress as a trainee and for informing his supervisors when he thought she was completely trained. At the main jail, Nelson exhibited the following conduct toward Bates: (1) he would stick out his tongue, make gestures with it and say that he "was good at eating pussy and that he knows [Bates] would enjoy it"; (2) he would come up behind Bates and whisper that he would like to take her "to the hot tubs and eat pussy and he'd love to find out what it was like if [Bates] gave him a blow job with [her] braces on; (3) he commented that he would like to "butt fuck [another female deputy sheriff] and then pull out and come all over her face"; and (4) he told Bates: "I bet you'd like me to fuck you in the butt, I'd bet you'd love that." Nelson also touched Bates on the back and front of her thighs three or more times. On several occasions he told Bates that in order to "get off training," she would have to "give him head." Nelson has admitted that he did and said these things.

[11 Cal.4th 999] Also in 1984, Nelson grabbed or slapped Toni Daugherty on the buttocks. Daugherty objected immediately when Nelson touched her, and he did not touch her again. Nelson called Daugherty the next day and asked about the "red marks [he] put on [her] ass." After Daugherty reported Nelson's behavior and the sheriff's department began an internal investigation, she began receiving obscene phone calls at home from Nelson.

When Bates and Daugherty reported Nelson's conduct to a captain in the sheriff's department, he instructed them to report the incidents to the internal affairs division.

Another deputy sheriff, Zana Murphy, later reported that Nelson had made lewd and sexually suggestive comments to her as well. In particular, Nelson had discussed oral sex and sodomy with Murphy and wanted to know if she was a "swallower or a spitter."

After interviewing witnesses, an investigator at the sheriff's department submitted a detailed report which sustained the allegations of sexual harassment against Nelson. Based on this report, the sheriff's department suspended Nelson without pay for 14 days. Nelson appealed the discipline pursuant to a collective bargaining agreement, and an arbitrator reduced the suspension to two days.

Additionally, the female deputies complained about alleged harassment by Sergeant David Pascual. They also charged that Lieutenants Larry Kelly and Ernie Ruch and others failed to act timely in investigating the complaints or in taking remedial action to halt the harassment. The County investigated these allegations and concluded there was insufficient evidence to support them.

In 1987, Bates, Daugherty and Murphy sued Nelson, the County and others in the federal district court in San Francisco, alleging, among other things, that Nelson had sexually harassed them in violation of title VII of the Civil Rights Act of 1964 (Title VII) (42 U.S.C. § 2000e-2) and the Fair Employment and Housing Act (FEHA) (Gov.Code, § 12940, subd. (h)). After being served in the federal action, Nelson requested the County to defend and indemnify him pursuant to sections 825 and 995 of the Government Code. The County refused, taking the position that Nelson acted outside the scope of employment when sexually harassing the three deputies. [11 Cal.4th 1000] Nelson was able to obtain counsel paid for by his homeowner's insurance carrier, Farmers Insurance Group (Farmers). 1

Shortly before trial in the federal action, the federal district court dismissed Murphy's claims against Nelson as time barred. On the date set for trial, Nelson settled with Bates and Daugherty for $150,000 and was dismissed from the action. The district court, on Nelson's motion and without objection

[906 P.2d 446] by the County, found that the settlement was made in good faith pursuant to Code of Civil Procedure section 877.6. The settlement amount was paid by Farmers

The sexual harassment claims against the County and the other individual defendants proceeded to a jury trial, and the jury received instructions on the legal standards applicable to employer liability under FEHA and those applicable to constructive discharge. 2 No instructions pertaining to the doctrine of respondeat superior or vicarious liability were given. The jury was directed to award damages, if any, separately against the County and the remaining individual defendants.

The jury found in favor of the female deputies. On the verdict form, the jury answered yes to a question asking if "any plaintiff" was "a victim of sexual discrimination, sexual harassment, or retaliation in violation of California Government Code § 12,940 [sic ]?" The jury also specified on the verdict form that the County had constructively discharged Bates. The jury awarded damages against the County in the amount of $400,000 to Bates, $183,000 to Daugherty and $1.6 million to Murphy. 3

In June 1991, after their government claims were rejected, Farmers and Nelson filed the instant action seeking indemnity from the County and others for the amount Farmers had paid in settlement and in defense of the federal action. The parties filed cross-motions for summary judgment or summary adjudication,...

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