Kulshrestha v. First Union Commercial Corp.

• Citation: 33 Cal.4th 601,15 Cal.Rptr.3d 793,93 P.3d 386
• Decision Date: 19 July 2004
• Docket Number: No. S115654.,S115654.
• Court: United States State Supreme Court (California)
• Parties: Dheeraj KULSHRESTHA, Plaintiff and Appellant, v. FIRST UNION COMMERCIAL CORPORATION, et al., Defendants and Respondents.

15 Cal.Rptr.3d 793

93 P.3d 386

33 Cal.4th 601

Dheeraj KULSHRESTHA, Plaintiff and Appellant, v. FIRST UNION COMMERCIAL CORPORATION, et al., Defendants and Respondents.

No. S115654.

Supreme Court of California.

July 19, 2004.

Martin F. Jennings, Jr., Granite Bay, Stephan Mandell, Carmichael, and Leo Donahue, Gold River, for Plaintiff and Appellant.

Carlton, DiSante & Freudenberger, Mark S. Spring and Jeremy T. Naftel, Sacramento, for Defendants and Respondents.

BAXTER, J.

Under limited statutory circumstances, written out-of-court statements, though hearsay, may serve as competent evidence of the facts set forth therein, and may be used in lieu of other competent evidence, such as live testimony given under oath in court. "[D]eclarations," for instance, are allowed to support and oppose motions for summary judgment. (Code Civ. Proc., § 437c, subd. (b)(1) & (2).)¹ Critical here is section 2015.5, which defines a "declaration" as a writing that is signed, dated, and certified as true under penalty of perjury. In addition, section 2015.5 specifies that a declaration must either reveal a "place of execution" within California, or recite that it is made "under the laws of the State of California."

In this suit against a firm for which he briefly worked, the plaintiff sought to prevent summary judgment by filing a declaration under penalty of perjury that showed a "place of execution" in another state. (§ 2015.5.) Moreover, the document did not reference California's "laws." (Ibid.) The evidence was excluded, summary judgment was granted, and dismissal was affirmed on appeal.

We now decide if declarations signed under penalty of perjury outside this state satisfy section 2015.5, and are admissible in summary judgment and other authorized proceedings, even though the contents are not certified as true "under the laws of the State of California." The answer to this narrow question is no.

Section 2015.5 seeks to enhance the reliability of all declarations used as hearsay evidence by disclosing the sanction for dishonesty. Thus, the statute requires some acknowledgement on the face of the declaration that perjured statements might trigger prosecution under California law. The Legislature has determined that such knowledge can be inferred from the "place of execution" where the document shows it was signed here. (§ 2015.5.) All other declarations, including those signed in other states, must invoke "the laws of the State of California." (Ibid.) Indeed, when lawmakers added this phrase to section 2015.5 in 1980, it was deemed necessary to alert out-of-state declarants that California's perjury laws — which were made extraterritorial at the same time — might apply. (See Pen.Code, §§ 27, subd. (b), 118, subd. (a), 777b.) The lower courts correctly found the present declaration flawed in this regard. We will affirm the judgment.

FACTS

In October 2000, Dheeraj Kulshrestha (petitioner) filed a complaint for damages in superior court against First Union Commercial Corporation and its subsidiary, The Money Store (defendants). The complaint alleged that defendants induced petitioner to move from Ohio to California by making false promises regarding a managerial position he accepted in November 1999. Petitioner claimed he would not have taken the job if he had known the representations were untrue. The complaint further averred that because petitioner is "a male Indian of Hindu religion," defendants inadequately investigated a sexual discrimination charge that a female subordinate falsely made against petitioner, and wrongly terminated petitioner based on the same false charge in January 2000. The complaint contained four counts: fraud in the inducement, violation of Labor Code section 970 (barring false representations in job relocation offers), negligent misrepresentation, and discrimination based on race, sex, and/or religion.

In July 2001, after answering the complaint and conducting extensive discovery, defendants moved for summary judgment. The motion emphasized that no evidence supported certain elements of each cause of action, including fraudulent intent as to both fraud claims, material misstatements of fact as to the negligent misrepresentation claim, and either discriminatory intent or illegal termination as to the employment discrimination claim. In addition, evidence supporting the motion showed petitioner received the same job that he was offered, and that he was fired because he retaliated against the employee who brought the sexual discrimination charge.

Two weeks later, in August 2001, petitioner opposed the summary judgment motion. He mainly relied on his own declaration to describe relevant events. The last paragraph, which appeared immediately above petitioner's handwritten signature, said: "I declare under penalty of perjury that the above is true and correct, executed this 8th day of August 2001 at Columbus, Ohio."

Defendants replied, in part, by challenging petitioner's declaration. They claimed that because the declaration was not made "under the laws of the State of California," it violated section 2015.5 and could not be used to defeat summary judgment. According to the defense, the defect suggested artful drafting and a fear of California's perjury laws.

A hearing on the summary judgment motion and related matters occurred on August 29, 2001. The matter was then submitted. Several weeks later, on November 5, 2001, an order issued. First, the trial court sustained the objection to petitioner's declaration under section 2015.5. Second, the court granted summary judgment in defendants' favor, finding no admissible or substantial evidence to support the contested elements of each cause of action.

On November 14, 2001, petitioner sought to vacate summary judgment under section 473, subdivision (b). Petitioner did not dispute that his declaration was not made "under the laws of the State of California." However, petitioner maintained that through mistake or other excusable circumstance, counsel overlooked the omission, and forgot to offer to amend the declaration at the summary judgment hearing. Claiming triable issues existed on at least the two fraud counts, petitioner sought to file an amended declaration, to vacate the order granting summary judgment, and to obtain a trial on the merits.

In opposition, defendants maintained that petitioner and his counsel had no excuse for submitting the declaration in its initial form, and for waiting so long to offer to insert the missing statutory phrase. Defendants further claimed, among other things, that there was no evidence of fraudulent intent even assuming the trial court reconsidered its summary judgment ruling in light of petitioner's amended declaration. Finding no excusable neglect or other basis for relief, the trial court denied petitioner's motion under section 473, subdivision (b). Judgment was entered for the defense on April 29, 2002.

On appeal, petitioner challenged dismissal of his action insofar as it stemmed from the trial court's related decisions to strike his declaration and to grant summary judgment. Mounting a more vigorous defense of his declaration than before, petitioner argued that it "substantially complied" with section 2015.5, and that the trial court erred in not considering it in opposition to summary judgment. The Court of Appeal disagreed and affirmed the judgment. As noted, we granted review to decide whether declarations signed outside California must state they were made "under the laws of the State of California" in order to satisfy section 2015.5 and to be used as evidence.

DISCUSSION

In judicial proceedings, the trustworthiness of the evidence and the reliability of the factfinding process depend upon the notion that persons who possess relevant information appear in court and undergo cross-examination. (See Evid.Code, § 711 [statutory right to confront witnesses].) Such live testimony is conditioned, among other things, on the witness's capacity to understand the duty to tell the truth (id., § 701, subd. (a)(2)), and on his promise under oath or penalty of perjury to testify truthfully. (Id., § 710; see id., § 165 [broadly defining oath]; Code Civ. Proc., § 2094, subds. (a) & (b) [describing form of oath]; Pen.Code, §§ 118-129 [punishing perjury].) These rules convey the need for honesty and the sanction for false testimony. They also enhance credibility determinations. (See California v. Green (1970) 399 U.S. 149, 158, 90 S.Ct. 1930, 26 L.Ed.2d 489.) Any statement not made by a witness testifying in court before the fact finder constitutes hearsay evidence when offered for its truth. (Evid.Code, § 1200, subd. (a).) Largely because the declarant is absent and unavailable for cross-examination under oath, hearsay evidence is less reliable than live testimony. (1 Jefferson, Cal. Evidence Benchbook (Cont.Ed.Bar 3d ed. 2004) Hearsay and Nonhearsay Evidence, § 1.4, p. 5; see Crawford v. Washington (2004) 541 U.S. 36, ___, 124 S.Ct. 1354, 158 L.Ed.2d 177, 192-196 [limiting use in criminal trials of affidavits and other "testimonial" hearsay not subject to cross-examination].) Hearsay evidence is generally incompetent and inadmissible without statutory or decisional authorization, or absent stipulation or waiver by the parties. (See Evid.Code, § 1200, subd. (b); In re Cindy L. (1997) 17 Cal.4th 15, 26-27, 69 Cal.Rptr.2d 803, 947 P.2d 1340; Windigo Mills v. Unemployment Ins. Appeals Bd. (1979) 92 Cal.App.3d 586, 597, 155 Cal.Rptr. 63.)

Nevertheless, in limited kinds of judicial proceedings, hearsay evidence — especially written statements — may serve as the sole or primary evidence of relevant facts. Such is the case with "motion[s]" (§ 2009), including motions for summary judgment. (See § 437c, subds. (a) & (c) [summary judgment determines whether action has merit as matter of law and whether trial is necessary]; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843, 107 Cal.Rptr.2d 841, 24 P.3d 493 [...