Knickerbocker v. City of Stockton

• Decision Date: 03 March 1988
• Docket Number: No. C000527,C000527
• Citation: 199 Cal.App.3d 235,244 Cal.Rptr. 764
• Court: California Court of Appeals Court of Appeals
• Parties: David KNICKERBOCKER, Plaintiff and Appellant, v. The CITY OF STOCKTON et al., Defendants and Respondents.

Page 764

244 Cal.Rptr. 764

199 Cal.App.3d 235

David KNICKERBOCKER, Plaintiff and Appellant, v. The CITY OF STOCKTON et al., Defendants and Respondents.

No. C000527.

Court of Appeal, Third District, California.

March 3, 1988.

Steven P. Stein, Stockton, and Sat Karam Kaur Shalsa, for plaintiff and appellant.

Mayall, Hurley, Knutsen, Smith & Green and John Wm. Nolan, Stockton, for defendants and respondents.

SPARKS, Associate Justice.

In this case we consider the relationship between the doctrine of exhaustion of administrative remedies and judicial review under the administrative mandamus statute. (Code Civ.Proc., § 1094.5.)

Plaintiff David Knickerbocker appeals from the order sustaining a demurrer to his second amended complaint without leave to amend. ¹ He asserts his causes of action are viable. For reasons different than those advanced by the defendants and accepted by the lower court, we agree that some of the causes of actions cannot be maintained. The remaining causes of action are not precluded, however, and consequently a general demurrer to the entire complaint should not have been sustained. We shall therefore reverse the lower court's order.

FACTUAL AND PROCEDURAL BACKGROUND

A general demurrer admits the truth of all properly pleaded factual allegations in the complaint. (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496, 86 Cal.Rptr. 88, 468 P.2d 216.) Thus we recount our assumed facts from the plaintiff's complaint in order to determine if they add up to any causes of action. ²

Plaintiff commenced work as a police officer with the Stockton Police Department in March 1967. His performance had been consistently rated satisfactory or better in the intervening years and he had been repeatedly assured both expressly and by conduct of continued employment absent just cause for firing. In September 1984 plaintiff was fired by the city at the inducement of the individual defendants for "informing the Stockton Police Department of its deficiencies." At the time he was fired, plaintiff had attained the rank of lieutenant. He challenged his firing at a City of Stockton Civil Service Commission hearing, which--following three months of testimony--ordered him reinstated at the rank of sergeant with back pay. Plaintiff did not seek review under the administrative mandamus statute of his demotion or the Civil Service Commission's determination that there were grounds for disciplining him. Instead, within 100 days of the decision reinstating him at the lower rank, plaintiff filed a "claim for damages" with the City of Stockton, which was deemed rejected by operation of law on July 15, 1985. (See Gov.Code, § 905 et seq.)

The plaintiff then filed his original complaint for damages against the City of Stockton and four of its employees. Following two demurrers, the complaint crystallized its focus by the time of the second amendment to allege a violation of an implied-in-fact covenant not to fire him without good cause (Pugh v. See's Candies, Inc. (1981) 116 Cal.App.3d 311, 171 Cal.Rptr. 917), a violation of the covenant of good faith and fair dealing implied by law in every contract which precludes either party from depriving the other of the benefits of the underlying agreement (Koehrer v. Superior Court (1986) 181 Cal.App.3d The defendants demurred to this second amended complaint on the ground the plaintiff had failed to exhaust his administrative remedies by not challenging the decision of the Commission through a writ of administrative mandamus. (Code Civ.Proc., § 1094.5.) The trial court begrudgingly accepted this argument and sustained the demurrer without leave to amend.

1155, 1167-1171, 226 Cal.Rptr. 820), a tortious firing (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170, 164 Cal.Rptr. 839, 610 P.2d 1330) in that the defendants contravened the fundamental principles of public policy in favor of free speech contained in the First Amendment to the United States Constitution and Labor Code section 1102, an intentional interference by the individual defendants with his business relationship with the City of Stockton because they brought about his firing, and an intentional infliction of emotional distress by the individual defendants in causing him to be dismissed without good cause.

DISCUSSION

While the scent of defect may permeate the complaint, defendants are simply barking up the wrong judicial tree. Under the doctrine of exhaustion of administrative remedies, "the rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act." (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292, 109 P.2d 942.) The doctrine is not a matter of judicial discretion but is a fundamental rule of procedure. (17 Cal.2d at p. 293, 109 P.2d 942.) Consequently, "[w]hen no exception applies, the exhaustion of an administrative remedy is a jurisdictional prerequisite to resort to the courts." (County of Contra Costa v. State of California (1986) 177 Cal.App.3d 62, 73, 222 Cal.Rptr. 750.) The doctrine has absolutely no application in this case, as the judicial review of an agency determination can in no way be considered part of the administrative process which must be exhausted before a subsequent judicial action may commence.

What defendants are really asserting is that plaintiff is barred because he failed to exhaust his judicial remedies. (See 3 Witkin, Cal.Procedure (3d ed. 1985) Actions, § 247, p. 276.) This variation on the theme of exhaustion can be traced to the case principally relied upon by defendants, Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 131 Cal.Rptr. 90, 551 P.2d 410. There the hospital staff privileges of a physician were revoked and she thereafter exhausted all of the hospital's internal remedies in an unsuccessful effort to obtain reinstatement. Then, without seeking judicial review by mandamus to compel her readmission, she sued the hospital and members of its staff and committees in tort for damages. The high court held that the doctor could not maintain her tort action because she had never challenged the hospital's decision in a judicial mandamus proceeding. (Id., at pp. 482-485, 131 Cal.Rptr. 90, 551 P.2d 410.) Analogizing this case to the requirement of a successful termination in a malicious prosecution action, the court reasoned that plaintiff's tort action "is necessarily premised on an assertion that the hospital's decision to revoke plaintiff's privileges was itself erroneous and unjustified. Although a quasi-judicial decision reached by a tribunal of a private association may not be entitled to exactly the same measure of respect as a similar decision of a duly constituted public agency (citation), we believe that so long as such a quasi-judicial decision is not set aside through appropriate review procedures the decision has the effect of establishing the propriety of the hospital's action. (Cf. Hollywood Circle, Inc. v. Dept. of Alcoholic Beverage Control (1961) 55 Cal.2d 728, 731-733 [13 Cal.Rptr. 104, 361 P.2d 712].) Accordingly, we conclude that plaintiff must first succeed in overturning the quasi-judicial action before pursuing her tort claim against defendants." (Id., at p. 484, 131 Cal.Rptr. 90, 551 P.2d 410.)

The underpinnings of this rule of exhaustion of judicial remedies, as the court's citation to the Hollywood Circle case reveals, are buried in the doctrine of res judicata or that portion of it known as collateral estoppel and more recently as issue preclusion. In the cited case, the petitioner's liquor license was revoked by the Department of Alcoholic Beverage Control and he then filed a belated appeal to Alcoholic Beverage Control Appeals Board. The Board then dismissed the appeal as untimely and petitioner challenged the dismissal in a writ proceeding. The superior court denied the writ and the court of appeal affirmed. Thereafter, petitioner sought unsuccessfully to reopen his appeal before the Board and once again sought judicial review by way of a writ application. Applying the doctrine of res judicata, the high court held that "[t]he determination in the first mandate proceeding that the dismissal of petitioner's appeal was proper therefore bars any further inquiry into that question." ( Hollywood Circle, Inc. v. Dept. of Alcoholic Beverage Control, supra, 55 Cal.2d at p. 733, 13 Cal.Rptr. 104, 361 P.2d 712.)

Defendants misread this requirement of exhaustion of judicial remedies as one for exhaustion of administrative remedies and argue that mandate proceedings are a jurisdictional prerequisite to filing a tort action for damages in all cases. Their citations to Witkin's treatise is not helpful to their argument. The cited passages merely recount the settled principle that where administrative remedies have not been exhausted, the courts will neither permit a judicial review of the agency's action nor an independent action to be maintained. (2 Witkin, Cal. Procedure (3d ed. 1985) Jurisdiction, § 69, p. 437; 3 Witkin, Cal. Procedure, supra, § 234, pp. 264-265.) But there is nothing in the treatise to suggest a writ of administrative mandamus is part of the administrative remedy and the plaintiff here exhausted his administrative remedies before the City of Stockton before he filed suit. What he failed to do was exhaust his judicial remedies. The question here is whether that failure bars his suit for damages.

Although springing from similar concerns, the two exhaustion requirements are different. Judicial exhaustion is a species of res judicata while administrative exhaustion is a fundamental rule of procedure. The first governs what may be litigated and the second the forum where the claims must first be adjudicated. One is preclusive while the other is jurisdictional. The exhaustion of administrative remedies is deemed jurisdictional because "[t]he administrative tribunal is created by...