Johnson v. County of Fresno

• Decision Date: 03 September 2003
• Docket Number: No. F041054.,F041054.
• Citation: 111 Cal.App.4th 1087,4 Cal.Rptr.3d 475
• Court: California Court of Appeals Court of Appeals
• Parties: Christina JOHNSON, Plaintiff and Appellant, v. COUNTY OF FRESNO et al., Defendants and Respondents.

4 Cal.Rptr.3d 475

111 Cal.App.4th 1087

Christina JOHNSON, Plaintiff and Appellant, v. COUNTY OF FRESNO et al., Defendants and Respondents.

No. F041054.

Court of Appeal, Fifth District.

September 3, 2003.

Review Denied December 17, 2003.^*

Law Offices of Wagner & Jones and Andrew B. Jones, Fresno; Law Office of John K. Ormond and John K. Ormond IV, Fresno, for Plaintiff and Appellant.

McCormick, Barstow, Sheppard, Wayte & Carruth, Michael G. Woods, Joseph R. Becerra, Fresno, and Todd W. Baxter, for Defendants and Respondents.

OPINION

WISEMAN, J.

Getting a grasp of this case requires a trip through a procedural maze culminating in a nonintuitive result, a journey for which we beg the reader's indulgence. Christina Johnson filed a complaint against the County of Fresno and one of its employees, Michael Stribling, alleging claims for sexual harassment, negligence and other torts. Stribling worked for the County's Department of Health and was Johnson's treating counselor. Alleging that Stribling made sexual advances toward her (among other things), Johnson filed a complaint against the County and Stribling. The County denied Stribling any defense, reasoning that he acted outside the course and scope of his employment. On the day set for the hearing of the County's motion for summary judgment on this issue, Johnson dismissed the County out of the lawsuit, with prejudice. Johnson later entered into a stipulated judgment in the amount of $165,000 with Stribling, who, predictably, admitted his contact with Johnson occurred during the course and scope of his employment with the County. The errant employee, Stribling, then assigned to Johnson his right to pursue indemnification from the County. Johnson then filed a complaint against the County seeking indemnification (on behalf of Stribling) from the County and agreed not to try to collect against Stribling for 18 months.

Irritated, the County filed a demurrer which was sustained without leave to amend. The trial court opined that our holding in Rivas v. City of Kerman (1992) 10 Cal.App.4th 1110, 13 Cal.Rptr.2d 147 precluded Johnson's recovery because the County refused to provide a defense. Johnson appeals, arguing Government Code section 825.2 provides a potential basis for her recovery.

We conclude section 825.2 permits a public employee to seek indemnification from his employer for a stipulated judgment where the employer has refused to provide a defense on the ground the employee was not acting within the scope of his employment. Recognizing the County's frustration in being sued by a party that originally dismissed it out with prejudice and who is now in alliance with an alleged sexual aggressor, we are reminded of William Shakespeare's character, Trinculo, from The Tempest, who lamented: "misery acquaints a man with strange bedfellows."¹

DISCUSSION

Johnson argues that the court erred in sustaining the demurrer without leave to amend based on the following grounds: 1) section 825.2 allows for a public employee's recovery from his employer even where the employer has declined to provide a defense to the employee because the employee was allegedly acting outside the scope of his employment; and/or 2) Government Code sections 825 and 825.2 do not provide the exclusive basis under which a public entity may be required to provide indemnity for the acts of its employees.

"In reviewing a judgment of dismissal after a demurrer is sustained without leave to amend, we must assume the truth of all facts properly pleaded by the plaintiff ..., as well as those that are judicially noticeable." (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 814, 107 Cal.Rptr.2d 369, 23 P.3d 601.) Here, the issues are predominantly legal.

I. Application of sections 825 and 825.2

Johnson contends that section 825.2 allows for a public employee's recovery from his employer even where the employer has declined to provide a defense. We first review the relevant Government Code provisions.

Section 825, subdivision (a), states:

"(a) Except as otherwise provided in this section, if 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 the 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."

Section 825.2, in turn, provides:

"(a) Subject to subdivision (b), if an employee or former employee of a public entity pays any claim or judgment against him, or any portion thereof, that the public entity is required to pay under [s]ection 825, he is entitled to recover the amount of such payment from the public entity.

"(b) If the public entity did not conduct his defense against the action or claim, or if the public entity conducted such defense pursuant to an agreement with him reserving the rights of the public entity against him, an employee or former employee of a public entity may recover from the public entity under subdivision (a) only if he establishes that the act or omission upon which the claim or judgment is based occurred within the scope of his employment as an employee of the public entity and the public entity fails to establish that he acted or failed to act because of actual fraud, corruption or actual malice or that he willfully failed or refused to conduct the defense of the claim or action in good faith or to reasonably cooperate in good faith in the defense conducted by the public entity." (See also § 995.2, subd. (a)(1) [public entity may refuse to provide defense for employee if it determines act or omission was not within scope of employee's employment].)

Both parties rely on our holding in Rivas v. City of Kerman, supra, 10 Cal.App.4th 1110, 13 Cal.Rptr.2d 147, in support of their positions. In Rivas, a public entity declined to defend its employee on the ground the employee was not acting within the scope of his employment. The plaintiffs entered into a stipulated judgment with the employee, who assigned to the plaintiffs all claims he had against his employer. The plaintiffs then filed an action for declaratory relief, alleging that section 825 required the public entity to pay the stipulated judgment on the employee's behalf. We held that section 825 does not compel a public entity to pay a judgment entered against its employee unless the public entity provided the employee's defense. (Rivas v. City of Kerman, supra, 10 Cal.App.4th at pp. 1113-1114, 13 Cal.Rptr.2d 147.)

In reaching our conclusion, we addressed the relationship between sections 825 and 825.2. The analysis is useful here:

"The language of section 825 clearly indicates the section is applicable only if the public entity provides a defense for the employee.... [¶] That the phrase `the defense' in paragraph one refers to a defense provided by the public entity is ... supported by the language used in section 825.2 in which, inter alia, it is specifically stated the employee must `conduct the defense of the claim or action in good faith or to reasonably cooperate in good faith in the defense conducted by the public entity [italics added]' in order to be entitled to recover any sums he or she has expended to satisfy a judgment arising out of his or her employment with a public entity. `Under well-established principles of statutory construction, these interrelated provisions must be construed together and harmonized if possible. [Citation.] ... [W]hen the same word or phrase is used, it should be given the same meaning in the related part of the law.' [Citation.] Section 825 and section 825.2 are part of one comprehensive statutory framework and are inextricably interwoven; therefore, the phrase `the defense' should be construed in section 825 to have the same meaning as that explicitly given it by the Legislature in section 825.2.

"... Therefore, construing the language of section 825 to give meaning to every word and phrase and in harmony with related statutes mandates the conclusion that the statute is directly applicable only when the public entity provides the employee's defense. [¶] ... [¶]

"... Sections 825 and 825.2 were enacted in 1963 as part of article 4, a package of legislation concerning governmental liability for torts committed by its employees. Section 825.2 is applicable to situations in which a public entity declines to defend an employee and ensures the employee will be held harmless against claims arising out of the scope and course of his employment with the public entity.

"... Section 825.2 anticipates the situation in which the public entity did not conduct the defense of the employee by expressly providing that in such situations, the employee is entitled to recovery if he complies with the requirements of subdivision (b). Pursuant to subdivision (b), the employee will be held harmless by the public entity employer if he proves he was acting within the scope and course of his employ and the public entity does not prove the employee acted because of actual fraud or malice or that the employee did not defend against the claim in good faith.

"To hold that section 825 applies even if the public entity does not defend the employee would permit [the plaintiffs] to compel the [public entity] to pay the stipulated judgment without proof that [the employee] acted within the scope and course of his employ or without giving the public entity a chance to demonstrate that he acted with actual malice ..., thus permitting [the employee] to circumvent the protections for public entities contained in section 825.2, subdivision (b) .... [¶] ... [¶]

"... [I]f...