Kelly v. General Telephone Co.

• Decision Date: 04 October 1982
• Citation: 136 Cal.App.3d 278,186 Cal.Rptr. 184
• Parties: John R. KELLY, Plaintiff and Appellant, v. GENERAL TELEPHONE COMPANY, Defendant and Respondent. Civ. 64781.
• Court: California Court of Appeals Court of Appeals

Page 184

186 Cal.Rptr. 184

136 Cal.App.3d 278

John R. KELLY, Plaintiff and Appellant, v. GENERAL TELEPHONE COMPANY, Defendant and Respondent.

Civ. 64781.

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

Oct. 4, 1982.

As modified on Denial of Rehearing Oct. 27,1982.

Daniel C. Lavery for plaintiff and appellant.

Albert M. Hart, H. Ralph Snyder, Jr., Santa Monica, and Richard E. Potter, Pomona, for defendant and respondent.

DALSIMER, Associate Justice.

Plaintiff, John Kelly, appeals from the order of dismissal entered following the sustaining of demurrers of defendant, General Telephone Company, without leave to amend.

On August 5, 1980, plaintiff filed a complaint containing three causes of action: slander, interference with business relations, and intentional infliction of emotional distress. An uncertainty demurrer to the cause of action for slander was sustained, general demurrers to the other causes of action were sustained, and plaintiff was given leave to amend.

Plaintiff's first amended complaint contained five causes of action: slander, interference with prospective advantage, negligent infliction of emotional distress, intentional infliction of emotional distress, and violation of Labor Code section 1050. The general demurrers to the causes of action for interference with prospective advantage and violation of Labor Code section 1050 were sustained without leave to amend. The general demurrers to the other causes of action were sustained with 30 days leave to amend. Since the order sustaining the demurrers did not include a statement of the grounds on which the order was based as required by Code of Civil Procedure section 472d, we are unable to ascertain the basis for the trial court's decision.

Plaintiff filed a second amended complaint. The general demurrer to plaintiff's second amended complaint was sustained without leave to amend "per [the] points and authorities in [defendant's] moving papers."

I

In our review of the orders sustaining the demurrers without leave to amend, we accept as true all factual allegations properly pleaded. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713, 433 P.2d 732; Goldstein v. Enoch (1967) 248 Cal.App.2d 891, 894, 57 Cal.Rptr. 19.) Plaintiff's cause of action for slander, the first cause of action in the second amended complaint, alleges that plaintiff voluntarily terminated his 13-month period of employment by defendant in July 1979. Plaintiff had an excellent work record with defendant and had a reputation as "a person of good name, honesty and credit." In December 1979, plaintiff reapplied for employment with defendant and was informed that he was " 'ineligible for rehire.' " Plaintiff alleges that his former supervisor, Tom Hansen, "acting within the scope of his employment," said to Mr. Robert McGinity, Mr. Hansen's supervisor and managing agent of defendant, that plaintiff " 'misused company funds by buying materials without the proper authorization' " and falsified invoices. Plaintiff alleges that these statements were made to various other employees of defendant, including people in the personnel office. As a result, defendant changed plaintiff's personnel records to state that he was " 'ineligible for rehire.' "

Plaintiff alleges that Hansen made the statements with intent to injure plaintiff's reputation. He alleges that Hansen made the statements for the reason that he hated plaintiff because of plaintiff's union activities.

Defendant argues that plaintiff did not allege publication of these statements because plaintiff alleged only that the statements were made by one of defendant's employees to other employees of defendant. This argument is without merit as publication occurs when a statement is communicated to any person other than the party defamed. (Bindrim v. Mitchell (1979) 92 Cal.App.3d 61, 79, 155 Cal.Rptr. 29, cert. den., 444 U.S. 984, 100 S.Ct. 490, 62 L.Ed.2d 412.) Under principles of respondeat superior, an employer may be held liable for a defamatory statement made by its employee. (See Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 411, 134 Cal.Rptr. 402, 556 P.2d 764.) That publication may involve internal corporate statements was recognized in Agarwal v. Johnson (1979) 25 Cal.3d 932, 944, 160 Cal.Rptr. 141, 603 P.2d 58, the court stating that internal company statements regarding the plaintiff's " 'lack of job knowledge and cooperation' " were "published." (Ibid.)

The statement that plaintiff falsified invoices was slanderous per se in that it charged plaintiff with forgery. Civil Code section 46 defines slander in pertinent part as follows: "Slander is a false and unprivileged publication, orally uttered ... which: [p] 1. Charges any person with crime ...." Forgery may be committed by falsification of invoices with intent to defraud. (Pen.Code, § 470.) The statement that plaintiff falsified invoices clearly implied that plaintiff did so with intent to defraud. (See Carl v. McDougal (1919) 43 Cal.App. 279, 281, 184 P. 885.)

The qualified privilege of Civil Code section 47, subdivision 3, may apply to the statement that plaintiff falsified invoices. That section provides in pertinent part that "A privileged publication ... is one made ... [p] 3. In a communication, without malice, to a person interested therein, (1) by one who is also interested ...." This qualified privilege may exist where the communicator and recipient have a common interest and the communication is reasonably calculated to further that interest. (Deaile v. General Telephone Co. of California (1974) 40 Cal.App.3d 841, 846, 115 Cal.Rptr. 582.) Communication among a company's employees that is designed to insure honest and accurate records involves such a common interest.

Malice necessary to prevent application of the qualified privilege may be alleged by pleading that the publication was motivated by hatred or ill will toward the plaintiff. (See Sanborn v. Chronicle Pub. Co., supra, 18 Cal.3d 406, 413-414, 134 Cal.Rptr. 402, 556 P.2d 764.) Plaintiff alleges, "the statements set forth above were published ... with express and implied malice and with design and intent to injure plaintiff in his good name, reputation and employment .... The statements were made with malice in fact by Tom Hansen ... in that: ... [p] (c) Mr. Hansen ... harbored ill will and hatred for the plaintiff in that he has a history of being active with his union ...." By these allegations, plaintiff sufficiently pleaded malice. (See ibid.) The trial court erred in sustaining the demurrer to the cause of action for slander.

II

Plaintiff employs in part a "chain letter" or cumulative type of pleading. That is, plaintiff's cause of action for negligent infliction of emotional distress, the second cause of action in the second amended complaint, incorporates by reference the entire first cause of action. This type of pleading should be avoided as it tends to cause ambiguity and creates redundancy.

Plaintiff alleges that defendant had a duty not to accuse any of its employees of falsifying invoices without conducting a reasonable investigation. Plaintiff then alleges that defendant breached this duty "by its conduct mentioned herein." There is no express allegation of defendant's failure to investigate. Plaintiff further alleges that as a proximate result of defendant's breach, he suffered humiliation and emotional distress.

As discussed ante at page 187 the qualified privilege under Civil Code section 47, subdivision 3, protects a defendant from being held liable in defamation for statements made without malice by any of its employees to other employees of that defendant. Thus, an employer is not liable for defamation if one of its employees advises other employees, such as personnel officers, of a suspicion that a former employee falsified records as long as the communication is not motivated by malice. We hold that this privilege applies with equal force to negligent infliction of emotional distress. We also hold that a corporation may be held liable for negligent infliction of emotional distress when its employee, acting within the scope of his employment makes a defamatory internal corporate communication concerning a third party without first conducting a reasonable investigation as to the truth of the matter if the communication is motivated by malice. A corporation can act only through its agents. Mr. Witkin has stated, "A private corporation is ordinarily liable under the doctrine of respondeat superior for torts of its agents or employees committed while they are acting within the scope of their employment." (4 Witkin, Summary of Cal. Law (8th ed. 1974) Torts, § 26, p. 2326, original italics; also see 1 Witkin, Summary of Cal. Law (8th ed. 1974) Agency and Employment, § 155, p. 754.) As mentioned ante, at page 186, the second amended complaint alleged that Mr. Hansen's acts were done within the scope of his employment by defendant. Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 930, 167 Cal.Rptr. 831, 616 P.2d 813, held that there is a cause of action for negligent infliction of serious emotional distress. The court there held that such a cause of action was present because the defendant's conduct was objectively verifiable conduct that foreseeably elicited a serious emotional response, thus serving as a measure of the validity of the plaintiff's claim of emotional distress. Failure to investigate charges of falsification of invoices is also objectively verifiable and likely to cause serious emotional distress.

Although plaintiff alleged that he suffered emotional distress, he failed to allege the degree of emotional distress suffered. Serious emotional distress is an essential element of a cause of action for negligent infliction of emotional distress. (See ibid.) Since plaintiff failed to allege that defendant's conduct caused him to suffer serious emotional distress, and also failed to allege that Mr Hansen did not conduct a reasonable...