Lee v. Bank of America, G012606

Citation27 Cal.App.4th 197,32 Cal.Rptr.2d 388
Decision Date29 July 1994
Docket NumberNo. G012606,G012606
CourtCalifornia Court of Appeals
Parties, 9 IER Cases 1445 Cynthia Diane LEE, Plaintiff and Appellant, v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Defendant and Respondent.
OPINION

SILLS, Presiding Justice.

The real issue in this case is whether a person may be sued for something he or she has not yet done.

I

Here are the facts. 1 In 1988 Cynthia Diane Lee was the manager of branch operations at a Bank of America branch in Costa Mesa. She complained to her supervisor about various safety hazards at the branch, including exposed electrical wiring, broken metal cabinets with jagged edges, teller carts with broken wheels, loose lighting fixtures, chairs with broken casters and exposed nails and tacks, a broken stairway rail, lack of adequate drinking water and torn stair floor. She also complained to her supervisor's superiors that he had failed to release funds to a marshall who was executing a lien.

On March 14, 1988, Lee was demoted. She was given a memo stating she would be given "a position of less managerial responsibility in another office." Her salary was to be reduced by $200 per month. The supervisor allegedly told Lee that the demotion would be effective March 22, 1988.

After the demotion, Lee suffered a "stress/anxiety attack" allegedly as the result of her "employment situation." She was then placed on extended medical leave until January 1989, when her doctor allowed her to return to work. When Lee returned she was offered a position as an assistant manager of branch operations at a branch in Laguna Beach, which she rejected in part because it still represented a demotion. She ended up in "staff available," i.e., waiting assignment.

On March 17, 1989--a little more (or a little less) than a year after her demotion--Lee, representing herself, filed a complaint against Bank of America. While denominated "wrongful termination," the complaint made no allegations of actual termination of employment. The theory of the complaint was that after Lee had "conveyed to her superiors ... information she observed of illegal wrongdoing" which she "reasonably believed to be a violation of public policy," she was demoted in retaliation for it. Though she styled it a "demotion and/or forced resignation," she was in fact still an employee of the bank at the time of filing. Lee was fired on April 28, 1989--more than a month after she filed suit.

Two years went by. Eventually, on April 30, 1991, she filed a first amended complaint for wrongful termination. All causes of action in this document were based on the April 1989 termination. 2

Bank of America answered the first amended complaint in June 1991, and, six months later, brought a motion for summary judgment based on, among other things, the running of the statute of limitations after the expiration of two years from the date of the actual termination. The trial court granted the motion; Lee has appealed from the ensuing judgment of dismissal. 3 She has not made any effort to show that her causes of action in the first amended complaint are not subject to either the one-year statute for personal injuries (Code Civ.Proc., § 340, subd. (3)) or the two-year statute for breaches of oral contracts. (Code Civ.Proc., § 339, subd. (1).) The crux of the case is whether her amended complaint "relates back" to her earlier one.

II

The closest case on point is Honig v. Financial Corp. of America (1992) 6 Cal.App.4th 960, 7 Cal.Rptr.2d 922. In Honig a savings and loan executive filed a complaint while still employed by the institution. He alleged a "campaign of harassment, threats, humiliation, debasement and intimidation" in retaliation for his objection to being forced to misrepresent the nature of the certificates of deposit he was selling. The executive feared his discharge was imminent and filed suit as a "preventative measure." (6 Cal.App.4th at p. 963, 7 Cal.Rptr.2d 922.) 4

After the complaint was filed, the executive was summoned before a meeting of the savings and loan's ethics committee. He requested his counsel be present. The request was refused. He then refused to discuss the pending lawsuit. He contended he was the object of " 'trumped up' " charges. He was fired for insubordination. (Ibid.)

More than two and one-half years after the original complaint was filed, the savings and loan filed a summary judgment motion. The executive opposed the motion and filed his own motion to amend the complaint to include additional paragraphs relating to the events leading up to the discharge. Further, the proposed complaint added a cause of action for defamation "based upon spreading to others the reason for the discharge." (Id. at pp. 965-966, 7 Cal.Rptr.2d 922.) The trial court refused to allow the amendments to the complaint and granted the summary judgment motion.

The appellate court held it was an abuse of discretion to refuse the request to amend the complaint. It concluded that the facts in both the original and amended complaints "all related to [the executive's] discharge" and therefore came within the same general set of facts test which California courts use to determine whether amendments relate back to an earlier complaint. (Id. at pp. 965-967, 7 Cal.Rptr.2d 922.) 5 The Honig court reasoned that the proposed amendments were a "continuation of the events asserted in the initial pleading." They "finished telling the story begun in the original complaint." (Id. at p. 966, 7 Cal.Rptr.2d 922.)

The Honig court went on to state that all the injuries in the proposed complaint--including those asserted in the defamation cause of action--were to be "expected" from a wrongful discharge. The court said, "It is expected that fired employees may have difficulty in obtaining new employment and that allegations surrounding their discharge may be spread to others. When an employer discharges an employee it is not unusual for the employer to defend the termination by reasserting the stated reasons for it." Hence even the defamation cause of action related back to the original complaint. (Id. at p. 967, 7 Cal.Rptr.2d 922.) Essentially the court said that if an employer terminates someone, the employer can "expect" to be sued for defamation. (Ibid.)

In its brief in this appeal, Bank of America struggles valiantly to distinguish Honig, arguing that in Honig the original lawsuit was filed prior to any adverse action by the employer and that the proposed amendments in Honig all related to an existing claim for wrongful termination (whereas here the amended complaint relates to a new claim for wrongful termination, the old claim being one for wrongful demotion ). The underlying basis of this attempted distinction appears to be that because the discharge in Honig was "imminent," the basic facts in both the original and amended complaints in Honig were the same: the actual discharge of the executive.

There are three reasons, however, why Honig will not be so distinguished. The first is that in Honig, as here, the lawsuit was filed while the plaintiff was still an employee of the defendant and had not yet been fired. There is no gainsaying that in both cases the original complaint was filed before the employee was actually terminated, and thus in each case events upon which the amended complaints were based had not yet happened when the original complaints were filed.

The second is that the "no adverse action" distinction proffered by Bank of America here is not supported by the facts in Honig. While there may have been no formal "adverse action" taken in Honig, the original complaint did allege a "campaign of harassment" that is analogous to the demotion here. In both Honig and the present case it is obvious the employer was displeased with the employee before actual termination.

Third, it is inescapable that in Honig a defamation action was allowed to relate back to the original complaint when by its very nature that defamation action was predicated on actions that necessarily had not yet happened. If a cause of action for defamation based on facts that occurred after the filing of the original complaint related back to the original complaint in Honig, then a cause of action for wrongful termination based on facts that clearly occurred after the original complaint should relate back here. Actions for wrongful demotion and wrongful discharge easily have a greater common nexus (the nature of an employer's conduct toward an employee) than actions for wrongful discharge and defamation.

The question before us is not whether Honig can be distinguished, but whether it should be followed.

III

We decline to follow Honig for two reasons. One, the case is fundamentally inconsistent with settled California law that causes of action do not accrue until after defendants have committed the wrongful act which gives rise to the cause of action in the first place. 6 Two, the case is inconsistent with the way our Supreme Court has construed the same general set of facts test which governs whether amended complaints relate back to original complaints for statute of limitations purposes.

A

Under section 312 of the California Code of Civil Procedure, civil lawsuits must be commenced within the time prescribed by the statutes of limitation "after the cause of action shall have accrued." It is well settled--perhaps because it is merely common sense--that a cause of action does not begin to "accrue" until after some wrongful act is done. (See Prudential-LMI Com. Insurance v. Superior Court (1990) 51 Cal.3d 674,...

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