Gee v. California State Personnel Bd.

• Decision Date: 20 March 1970
• Citation: 85 Cal.Rptr. 762,5 Cal.App.3d 713
• Parties: Daniel GEE, Plaintiff and Appellant, v. CALIFORNIA STATE PERSONNEL BOARD, an agency of the State of California, Defendant and Respondent. Civ. 26331.
• Court: California Court of Appeals Court of Appeals

Page 762

85 Cal.Rptr. 762

5 Cal.App.3d 713

Daniel GEE, Plaintiff and Appellant, v. CALIFORNIA STATE PERSONNEL BOARD, an agency of the State of California, Defendant and Respondent.

Civ. 26331.

Court of Appeal, First District, Division 1, California.

March 20, 1970.

Hearing Denied May 15, 1970.

Richard H. Perry, Burlingame, for plaintiff and appellant.

Thomas C. Lynch, Atty. Gen. of the State of California, Wiley W. Manuel, Deputy Atty. Gen., San Francisco, for defendant and respondent.

ELKINGTON, Associate Justice.

Appellant Daniel Gee held the civil service classification of 'General Auditor III' in the State Department of Justice. He was dismissed from that position, effective October 27, 1966, by the Attorney General for causes set forth in Government Code section 19572 as follows: '(f) Dishonesty. * * * (t) Other failure of good behavior either during or outside of duty hours which is of such a nature that it causes discredit to his agency or his employment.'

Thereafter, on proceedings taken by Gee, the State Personnel Board sustained his dismissal without modification. Gee then filed a mandamus proceeding in the superior court, seeking thereby a review of the decision of the Board. The appeal before us is taken from a judgment of the superior court denying him the requested relief.

The findings of the State Personnel Board are extensive. From them it appears that in 1964 the Department of Alcoholic Beverage Control approved transfer of, and issued to Gee, three on-sale general licenses to sell alcoholic beverages. On each of the license applications Gee certified, under penalty of perjury: (1) that he was or would be the 'sole owner' of the bar business for which the license was sought; (2) 'that no person other than the applicant * * * has any direct or indirect interest in the applicant's * * * business to be conducted under the license for which this application is made'; and (3) that the total purchase price of the bar business and license was his 'individual contribution' from his commercial account which was 'Deposited from real estate returns and profits past 3 years.' It was found as to one of the bars, the 'Padre,' that the business for the greater part of the two-year period following issuance of the license was in fact owned and operated by others; that Gee's only connection was to supply the license and receive 15 percent of the bar's gross receipts. It was further found that the remaining bars, the 'Maurice' and 'Gaylord,' were in fact owned by one Chew, who personally, from his own funds, paid the entire purchase price of the businesses and licenses. Chew was found to have received all of the payments thereafter made by the operator of the 'Maurice' who operated under color of the license issued to Gee.

Gee makes seven assignments of error which we now proceed to discuss.

1. It is contended that the findings of the State Personnel Board 'are not supported by substantial evidence in the light of the whole record.'

It should first be pointed out that the State Personnel Board is a statewide administrative agency which is created by, and derives adjudicating power from, the state Constitution. Its factual determinations are to be accepted by the superior court and by this court if they are supported by substantial evidence. (Shepherd v. State Personnel Board, 48 Cal.2d 41, 46, 307 P.2d 4; Tabory v. State Personnel Board, 208 Cal.App.2d 543, 545, 25 Cal.Rptr. 333.) In following the substantial evidence rule we are obliged to consider the evidence in the light most favorable to the Board, giving to it the benefit of every reasonable inference and resolving all conflicts in its favor. (Crawford v. Southern Pacific Co., 3 Cal.2d 427, 429, 45 P.2d 183; Laymon v. Simpson, 225 Cal.App.2d 50, 52--53, 36 Cal.Rptr. 859.)

Gee concedes that the Board's findings generally are supported by substantial evidence. However, he points out several instances where he says they are not. Referring to the 'Padre' bar he insists that the finding that one 'Dreyfuss' was the owner is not properly supported. The record before us shows an arrangement under which Gee was to get 15 percent of the 'Padre's' gross receipts; after paying expenses Dreyfuss was to keep the balance. Dreyfuss hired and fired the employees and he paid for the workmen's compensation insurance; Gee didn't know who the employees were or how much they were paid. The bar's inventory, including the liquor, was owned by Dreyfuss who paid for some of it with cash, and for some out of his personal checking account. And Gee admitted that he 'rented out' the Padre's business to Dreyfuss. This evidence amply supports the finding of the Board that Dreyfuss was the owner of the Padre bar and its business.

The Board's finding that Gee Knew that his arrangment with Dreyfuss was violative of the Alcoholic Beverage Control Act is amply supported by the unusual and clandestine nature of the operation, Gee's obvious high level of intelligence, and his statement under oath that no person other than himself would have any direct or indirect interest in the business to be conducted under the Padre bar's license.

Next, Gee complains of the finding that his later transfer of the Maurice and Gaylord bars to Peter Chew was 'merely a device to get Chew's name on the licenses he already owned.' He claims, in effect, that the presumption 'that official duty has been regularly performed' (Evid.Code, § 664), coupled with the license transfers by the Department of Alcoholic Beverage Control, operated to conclusively establish that Gee was previously the owner of the bar operations covered by the licenses. This contention also lacks merit. The presumption that official duty has been performed is a rebuttable presumption; its effect is to impose upon the party against whom it operates the burden of proof as to the nonexistence of the presumed fact. (Evid.Code, § 606.) From the evidence the Board could reasonably have concluded that this burden had been met.

The 'finding' that Gee's conduct was of such a nature as to bring discredit on his 'agency or employment' is also questioned. This is not truly a finding; it is more in the nature of a conclusion of law which we shall discuss post.

2. Next, Gee contends that 'Respondent's findings do not support its decision. Its action is arbitrary and capricious.'

The Board concluded (1) that Gee's 'conduct' in relation to the Maurice and Gaylord bars constituted 'dishonesty' within the meaning of Government Code section 19572, subdivision (f), and (2) that his conduct with the Padre bar and Dreyfuss during the time that he (Gee) was employed by the state was 'failure of good behavior either during or outside of duty hours which is of such a nature as to cause discredit to his agency or his employment' within the meaning of Government Code section 19572, subdivision (t).

'Dishonesty' connotes a disposition to deceive. (Midway School Dist. v. Griffeath, 29 Cal.2d 13, 18, 172 P.2d 857.) It "denotes an absence of integrity; a disposition to cheat, deceive, or defraud; * * *." (Hogg v. Real Estate Commissioner, 54 Cal.App.2d 712, 717, 129 P.2d 709, 712.) There can be no doubt that the conduct of Gee as found by the Board, including his false statements under oath as to the ownership and operation of the Maurice and Gaylord bars and the source of their purchase money, constituted dishonesty within the meaning of section 19572, subdivision (f), and supported the penalty of dismissal.

The Board's conclusion that Gee's conduct with the Padre bar during his state employment constituted 'failure of good behavior * * * outside of duty hours which is of such a nature that it causes discredit to his agency or his employment,' clearly based on substantial evidence, also supports the sanction of dismissal. It is noted that section 19572, subdivision (t) refers to conduct which would reflect discredit on the employing agency or the position held by the person engaging in such conduct, regardless of whether the conduct is publicized or not. (Orlandi v. State Personnel Bd., 263 Cal.App.2d 32, 37, 69 Cal.Rptr. 177.)

3. Gee points out that he had severed all connection with the Maurice and Gaylord bars prior to his civil service employment by the state on February 16, 1966. He contends that the law does not authorize his dismissal for acts which occurred prior to his employment.

We note that in the proceedings before the Board Gee had objected to its jurisdiction on the ground that some of the charged improper conduct occurred before he was employed by the state. Thereafter the objection was specifically Withdrawn by him. Although we need not consider the issue since it was not before that Board (see Reimel v. House, 259 Cal.App.2d 511, 515, 66 Cal.Rptr. 434; Reimel v. Alcoholic Bev. etc. Appeals Bd., 256 Cal.App.2d 158, 176, 64 Cal.Rptr. 26, 65 Cal.Rptr. 251), we nevertheless chose to review the merits of Gee's contention.

Gee was found to have shown serious attributes of dishonesty, unknown to the state prior to his employment. Honesty is not considered an isolated or transient behavioral act; it is more of a continuing trait of character. By its enactment of section 19572, subdivision (f), the Legislature indicated a strong public policy against having dishonest employees in the state service. That policy is particularly applicable to Gee's employment, for his duties as 'General Auditor III' in the Department of Justice called for investigation of the general type of business offense against state law, which he himself was found to have committed.

We find little authority on the point before us. However, in Dew v. Halaby, 115 U.S.App.D.C. 171, 317 F.2d 582, the dismissal of an airport traffic controller for homosexual conduct and use of narcotics prior to his civil service employment was upheld. Common sense indicated, the court said, that in many situations the government 'must have authority to separate employees because of...