Pichon v. Pacific Gas & Electric Co.

• Decision Date: 24 July 1989
• Docket Number: No. A041909,A041909
• Citation: 212 Cal.App.3d 488,260 Cal.Rptr. 677
• Court: California Court of Appeals Court of Appeals
• Parties: , 113 Lab.Cas. P 56,137, 4 IER Cases 1857 Val A. PICHON, Plaintiff and Appellant, v. PACIFIC GAS AND ELECTRIC CO. et al., Defendants and Respondents.

Page 677

260 Cal.Rptr. 677

212 Cal.App.3d 488, 113 Lab.Cas. P 56,137, 4 IER Cases 1857

Val A. PICHON, Plaintiff and Appellant, v. PACIFIC GAS AND ELECTRIC CO. et al., Defendants and Respondents.

No. A041909.

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

July 24, 1989.

As Modified on Denial of Rehearing Aug. 23, 1989.

Charles M. Kagay, Spiegel Liao & Kagay, San Francisco, for plaintiff and appellant

Howard V. Golub, Pamela Christensen, John R. Low, Pacific Gas and Elec. Co., San Francisco, for defendants and respondents.

STEIN, Associate Justice.

Val A. Pichon, a discharged employee, sued his former employer, Pacific Gas and Electric Co., alleging: (1) breach of an express and implied contract of employment terminable only for cause; (2) termination in violation of public policy; (3) breach of the implied covenant of good faith and fair dealing, and (4) negligent and intentional infliction of emotional distress. Plaintiff also alleged a cause of action under Labor Code section 3602, subdivision (b)(2), for concealment of a medical report stating that he was experiencing an emotional crisis and needed counseling.

The trial court granted the employer's motion for summary adjudication on the grounds that workers' compensation is the exclusive remedy for all of Mr. Pichon's claims for damages for injury to his psyche. The trial court subsequently granted the employer's "motion in limine " and dismissed plaintiff's remaining wrongful termination claims for contract damages on the ground that plaintiff's exclusive remedy was under the Workers' Compensation Act. That court further held that the compromise and release of plaintiff's workers' compensation claim constituted a waiver of any civil claims for damages. Pichon appealed claiming error as to each of these rulings.

We hold that: (1) Emotional distress caused by the termination of employment occurs within the course and scope of employment. (2) The exclusivity of workers' compensation does not preclude causes of action for economic or contract damages; however, the employer does have the right to set-off from any damages the amount of compensation paid. (3) A compromise and release executed in settlement of appellant's workers' compensation claim does not preclude appellant from suing for breach of contract, termination in violation of public policy, or breach of the covenant of good faith and fair dealing. (4) A decision of the California Unemployment Insurance Appeals Board finding that appellant was discharged for misconduct does not collaterally estop appellant from relitigating the reasons for his discharge.

FACTS

In view of the summary nature of the adjudication below, we are compelled to state the "facts" as they were alleged by appellant in his pleadings. Appellant's first amended complaint alleged that he was employed by PG & E, as a civil engineer, until August 30, 1983. During the course of this employment appellant alleged that he was harassed by his supervisor and singled out for unfair treatment. On August 15, 1983, a meeting was held to discuss appellant's job performance. When appellant became "very distraught and emotionally overcome" during this meeting, he was suspended from work pending On August 30, 1983, respondents met with appellant to discuss the reprimand. They gave him a set of behavior requirements to correct the described performance discrepancies. During this meeting, a longstanding dispute regarding appellant's refusal to adopt a bridge design recommended by one of his supervisors was renewed. Appellant continued to assert that his proposal was superior and that the design proposed by his supervisor was unsafe and entailed unnecessary cost that the public would ultimately bear. Appellant was then discharged for insubordination and publicly humiliated.

the results of an evaluation process and was referred to an internist and a psychologist. When appellant returned to work, his supervisor informed him that the doctors had found him fit to perform his duties and that there was no need for treatment or counselling. Appellant alleged that these medical reports recommended that he undergo crisis intervention psychotherapy. Respondents did not follow this recommendation and instead continued to harass appellant and reprimanded him by letter dated August 29, 1983.

Appellant's first cause of action was titled "wrongful termination" and combined allegations of breach of an express and implied contract to terminate only for cause, with allegations of termination in violation of public policy. The second cause of action was for breach of the covenant of good faith and fair dealing. ¹ Finally, the third and fourth causes of action were for intentional and negligent infliction of emotional distress.

Approximately a year after his termination, appellant filed a workers' compensation claim for injuries to his "psyche, heart, [and] nervous system." The claim listed the dates of injury as July 15, 1980, through August 30, 1984, and stated that the injury caused disability from August 30, 1984, to the present. On December 20, 1985, the Workers' Compensation Appeals Board approved a compromise and release of appellant's workers compensation claim for $42,000.

On July 27, 1987, respondents filed a motion for summary judgment and an alternative motion for summary adjudication. The court denied the motion for summary judgment but granted summary adjudication because "[t]he claims for damages for injury to [appellant's] psyche are barred by the Settlement and Release Order entered by the Workers' Compensation appeals board ... and by the exclusive remedy provisions of the Workers' Compensation Act."

On the first day of trial, respondents filed a "motion in limine " seeking dismissal of appellant's remaining claims for "economic" damages. On the authority of Shoemaker v. Myers (1987) 204 Cal.App.3d 30, review granted August 26, 1987 (S001726), respondents contended that, in addition to providing the exclusive remedy for appellant's negligent and intentional infliction of emotional distress claims and any other damage claims for emotional distress, workers' compensation also provided the exclusive remedy for his "wrongful termination" causes of action. Respondents also argued that the release of "any and all claims" set forth in the workers' compensation compromise and release constituted a waiver of his causes of action based on the termination of his employment. The court held a hearing on the motion that same day and appellant appeared and argued the merits. The court granted the motion and judgment for respondents was entered on February 11, 1988.

On February 17, 1988, appellant filed a "motion for relief" pursuant to Code of Civil Procedure section 473. On March 29, 1988, the court denied the motion and appellant

filed a notice of appeal on April 8, 1988.

I.

We shall first address the propriety of the court's summary adjudication that the exclusive remedy for appellant's claims of injury to his psyche caused by harassment on the job and the termination of his employment is provided by the California Workers' Compensation Act, Labor Code section 3200 et seq. The effect of the summary adjudication is to preclude appellant from litigating his causes of action for negligent and intentional inflicting of emotional distress, and from recovering any damages attendant to the remaining causes of action for injuries to appellant's psyche caused by harassment or termination of his employment.

Subject to certain narrowly defined exceptions, the California Workers' Compensation Act provides the exclusive remedy for injuries arising within the course of employment. (Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 472, 165 Cal.Rptr. 858, 612 P.2d 948.) The current code sections pertaining to the exclusivity of workers' compensation are Labor Code sections 3600 and 3602. ² Labor Code § 3600 provides in pertinent part:

"(a) Liability for the compensation provided by this division, in lieu of any other liability whatsoever to any person except as otherwise specifically provided in Sections 3602, 3706, and 4558, shall, without regard to negligence, exist against an employer for any injury sustained by his or her employees arising out of and in the course of the employment and for the death of any employee if the injury proximately causes death, in those cases where the following conditions of compensation concur:

"(1) Where, at the time of the injury, both the employer and the employee are subject to the compensation provisions of this division.

"(2) Where, at the time of the injury, the employee is performing service growing out of and incidental to his or her employment and is acting within the course of his or her employment.

"(3) Where the injury is proximately caused by the employment, either with or without negligence ..."

Labor Code section 3602, in turn, provides that where the conditions of compensation concur, workers' compensation is "the sole and exclusive remedy" for an employee in an action against his employer. The section lists three specified exceptions; however, none of them is relevant to the issue before us.

Cole v. Fair Oaks Fire Protection Dist., supra, 43 Cal.3d 148, 233 Cal.Rptr. 308, 729 P.2d 743, addressed the question whether the exclusive remedy provisions of the Workers' Compensation Act prior to the 1982 amendments preclude an employee from bringing a cause of action for intentional infliction of emotional distress against his employer. The court concluded that "when the misconduct attributed to the employer in actions which are a normal part of the employment relationship, such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances, an employee suffering emotional distress causing disability may not avoid the exclusive remedy provisions of the Labor Code by characterizing the employer's decisions as manifestly unfair, outrageous,...