Russell v. Geis
| Decision Date | 02 June 1967 |
| Citation | 251 Cal.App.2d 560,59 Cal.Rptr. 569 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Shirley RUSSELL, Plaintiff and Respondent, v. John GEIS, Defendant and Appellant. Evelyn GARRISON, Plaintiff and Respondent, v. John GEIS, Defendant and Appellant. Civ. 763. |
Fitzwilliam, Memering, Stumbos & DeMers, by Louis A. DeMers, Sacramento, for appellant.
Rust & Hoffman, Sacramento, by Ellis J. Horvitz, Los Angeles, for Shirley Russell.
Hughes, Maul, Fogerty & Dezzani, Placerville, for Evelyn Garrison.
OPINION
On April 1, 1963, defendant, a physician, severed his association with another doctor to engage in the sole practice of medicine in Placerville. Defendant offered plaintiff Russell, who had been receptionist for the two doctors, a position as his bookkeeper. She declined because of lack of experience, but accepted a position as receptionst. Plaintiff Garrison was then engaged as bookkeeper.
Approximately two and a half months later defendant, being dissatisfied with the book work of Mrs. Garrison, made Mrs. Russell the bookkeeper and Mrs. Garrison the receptionist. Both women made appointments, accepted payments from patients, issued receipts, and made entries on the books. They also assisted the doctor by cleaning his equipment and keeping the treatment rooms in order. Defendant had a firm of accountants establish a bookkeeping system for him, which neither plaintiff understood, nor, apparently, did defendant. Many items which should have been entered in an 'adjustment column' were entered as credits; in fact, the adjustment column was seldom used unless the doctor specifically directed an entry.
From time to time defendant accepted payments directly from patients and pocketed the money without notifying plaintiffs or making any bookkeeping entry. When a patient who had paid the doctor asked for a receipt at the outer office, one of the plaintiffs would check with him to verify payment. In such an instance the books reflected an irregularity as the money receipted for appeared as a debit entry but there was no bank deposit entry to offset it. However, the doctor estimated that he pocketed no more than $200 from fees for the entire year. Defendant also bartered medical services for the goods or services of patients, rather than money payments, transactions which were not properly reflected by book entries.
In December 1963 plaintiff Russell prepared a summary of accounts receivable for the year. Defendant believed the summary was inaccurate, and had his wife, who was not a bookkeeper, go over the accounts with him. As a result of this informal audit, defendant concluded that in excess of $5,000 was unaccounted for. He told two friends, Dr. Bliss and Dr. Bonser, that there were discrepancies in his books, and asked their advice. His personal attorney advised him to see the district attorney. He talked to a representative of the sheriff's office, Lieutenant Barton, who met with defendant and Deputy District Attorney DuFort.
Defendant told DuFort there were discrepancies in his books, that money was missing, and that plaintiffs were the persons responsible for the books. According to DuFort, defendant told him he believed plaintiffs had taken the money, although defendant denied making the accusation. DuFort Advised him to have an audit, which defendant was reluctant to do. DuFort told him, 'No audit, no prosecution. DuFort testified that he formed an opinion that plaintiffs were guilty of theft primarily on the statements made by defendant.
On January 24, 1964, defendant called plaintiffs into his office and, in the presence of one of his patients who was a deputy sheriff, and one of his accountants, Mr. Duce, questioned them about two accounts and asked them to explain some discrepancies in the books. Plaintiffs replied that they could not understand the bookkeeping system. After Duce and Herman left, defendant told plaintiffs he was going to have an audit made. Plaintiff Russell testified that the following then occurred:
'Q. Now, will you tell the ladies and gentlemen what the doctor said to you and that lady then in the room?
A. Well, at this time he said that he had told Mr. Duce to go ahead with an audit. It was prearranged at this time. To us he said that he was too small of a business to absorb the cost of an audit. It would cost a lot of money. He said now, girls, this is not blackmail, but if you will pay me $5,000 cash, no promissory notes, because it is too easy for you to go through bankruptcy, he wanted to get the whole thing. He said that it was a small community, we all had children in school and that it would be hard on the children and--excuse me. That our husbands may never work, and that as embezzlers, we would never be able to work again.
'Q. Was there anything said at that time about criminal proceedings?
A. He said that if it came to that, he is a professional man and his word would carry more weight than ours.'
Plaintiff Garrison's testimony corroborated that of plaintiff Russell as to this episode.
Defendant denied that he accused plaintiffs of stealing, but admitted he told them that if either could recall what had happened to the money they could approach him and the matter would go no further because he was not interested in retribution; that if the audit showed no discrepancies they could return to work, but if it showed discrepancies their employment would be terminated; that he did not want to prosecute them; that they all had families and none of them wanted to undergo adverse publicity, but if the audit bore out the discrepancies he and his wife found, he would pursue the matter through criminal action rather than by a civil suit, because of bankruptcy laws. He suspended plaintiffs without pay, requested the keys to the office, the withheld their paychecks for earnings during the pay period.
Plaintiffs went to the labor commission in order to get their pay. Mrs. Russell testified that she received hers in May 1964.
On February 21, 1964, defendant's attorney, who was neither trial nor appeal counsel, wrote to the State of California, Department of Industrial Relations, Division of Labor Law Enforcement, 600 Forum Building, 1107 9th Street, Sacramento, California, as follows:
A copy of the letter was sent to defendant, who admitted receiving it and doing nothing. He testified, 'When I got the letter, the harm was done.'
A notice was forwarded to defendant by the Department of Employment, advising him that plaintiffs were seeking unemployed as there appeared to be a shortage of ment benefits. He went to the department, saw Mr. Hegwer, and told him that an audit was being conducted, that there were discrepancies in the books, and that plaintiffs were responsible for the books. He denied telling Hegwer that plaintiffs took the missing money. He said he went to the department to prevent payment of unemployment benefits to plaintiffs because he did not want his account as an employer charged.
Defendant testified that the completed audit did not show that money was missing, but did show discrepancies in the books. However, subsequent to completion of the audit, defendant testified at a grand jury hearing at which plaintiffs were indicted. A trial followed, defendant testified for the prosecution, and plaintiffs were unanimously acquitted.
Thereafter, in 1965, plaintiff Russell, after holding a job for a short time, again applied for unemployment benefits. Despite the fact that Mrs. Russell had been acquitted of the criminal charge defendant opposed her right to unemployment benefits by advising the department that he was currently engaged in litigation with her. He testified that he did this because the instant lawsuit was pending and he wanted to protect himself from liability.
Mrs. Garrison testified that while she was in the Department of Employment office filling out an application for a position with Safeway Stores, defendant entered the room, spoke to a girl at the counter who directed him to a man seated at a desk next to the one at which she was seated. She testified that she heard the following conversation between defendant and the department employee:
'He said, 'I've come to discuss the claims and eligibility of two of my former employees, Evelyn Garrison and Shirley Russell who are under suspicion--' excuse me, '--under investigation at this time,' and the gentleman said, 'I can't help you on that one. You'll have to see Mr. Haigwar."
Each plaintiff filed a complaint for defamation. Defendant answered, denying the material allegations of the complaints, and affirmatively alleged the defenses of truth, that any statement made was without malicious intent, and of conditional provilege pursuant to section 47, subdivision 3, of the Civil Code.
The two cases, consolidated for trial, are also consolidated on this appeal.
A novel question is presented as to the propriety of the trial court in striking the defense of conditional privilege at the conclusion of defendant's case.
Civil Code section 47 provides:
'A privileged publication or broadcast is one made--
'* * *ile
The persons to whom defendant allegedly made the accusations against plain...
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