Spratley v. Winchell Donut House, Inc.

• Decision Date: 28 January 1987
• Citation: 234 Cal.Rptr. 121,188 Cal.App.3d 1408
• Court: California Court of Appeals Court of Appeals
• Parties: Andrea SPRATLEY, Plaintiff and Appellant, v. WINCHELL DONUT HOUSE, INC., Defendant and Respondent. D004042.

Page 121

234 Cal.Rptr. 121

188 Cal.App.3d 1408

Andrea SPRATLEY, Plaintiff and Appellant, v. WINCHELL DONUT HOUSE, INC., Defendant and Respondent.

D004042.

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

Jan. 28, 1987.

Nissenberg & Nissenberg and David N. Nissenberg, LaJolla, for plaintiff and appellant.

Kinkle, Rodiger & Spriggs and Jefferi Hamilton, San Diego, for defendant and respondent.

KREMER, Presiding Justice.

The superior court sustained without leave to amend defendant Winchell Donut House, Inc.'s demurrer to plaintiff Andrea Spratley's first amended complaint for fraud and bad faith. The court entered judgment dismissing the lawsuit. Spratley appeals. We affirm the judgment of dismissal.

I

Spratley's first amended complaint's purported cause of action for fraud alleged: Spratley told Winchell she did not wish to accept employment with Winchell because she feared working alone at night as a baker at Winchell's shop where a burglary had recently occurred. To induce Spratley to enter into an employment contract with Winchell, Winchell's agent falsely and fraudulently told Spratley all locks at the shop had been changed after the burglary, only current employees of the shop had keys to the shop and Winchell would arrange for sheriff's deputies to provide continuous security for Spratley while she worked alone at night. About a month later while working alone at Winchell's shop in the early morning hours, Spratley was physically attacked by a person who was not a Winchell employee and who used a key to enter through a locked door. The intruder broke Spratley's skull and jaw and knocked her unconscious. Contrary to Winchell's representations, the locks on only one of the four shop doors had been changed after the earlier burglary and Winchell did not know who had keys to the shop. Further, Winchell asked sheriff's deputies to cruise by the shop, which was Spratley's first amended complaint's purported cause of action for bad faith incorporated the allegations of her purported cause of action for fraud and further alleged: Winchell breached the implied covenant of good faith and fair dealing in the parties' employment relationship by fraudulently inducing Spratley to enter into the employment contract and concealing material facts, by failing to provide her the promised security and allowing her to work alone at night in a recently burglarized shop, and by failing to change the locks on all doors as promised and represented. Winchell's breach jeopardized Spratley's life, health and safety.

done for a few weeks but then ceased; when Spratley asked Winchell to arrange renewed coverage, Winchell's agent said Winchell would take care of it but Winchell failed to do so. Winchell made such representations knowing they were false or without reasonable grounds to believe they were true. Winchell concealed from Spratley the fact not all locks had been changed. Winchell said it was doing everything possible to assure Spratley's safety. Spratley would not have entered the employment contract with Winchell had she known the concealed facts and the falsity of Winchell's representations. Winchell made the promises without intending to perform them. Winchell's fraud induced Spratley to enter an employment contract with Winchell and give up opportunities to work elsewhere at a greater salary under better working conditions. Spratley also incurred mental pain and [188 Cal.App.3d 1411] suffering and emotional distress. Spratley was entitled to $1,000,000 punitive damages.

Spratley's first amended complaint sought judgment for compensatory damages according to proof, damages for mental pain and suffering and emotional distress according to proof and $1,000,000 punitive damages.

II

Winchell demurred to Spratley's first amended complaint on the ground it failed to state facts sufficient to constitute a cause of action. Winchell asserted the court had no subject matter jurisdiction because workers' compensation was Spratley's exclusive remedy. (LAB.CODE, § 3602.)¹ After hearing, the court sustained Winchell's demurrer without leave to amend. The court found: "The first and second causes of action fail to state facts sufficient to constitute a cause of action against the demurring defendant; the court has no jurisdiction of the subject matter of plaintiff's first and second causes of action." The court entered judgment dismissing Spratley's lawsuit.

III

Under workers' compensation an employer is liable for injuries to its employee arising out of and in the course of employment. (§ 3600.) Where the conditions of workers' compensation exist, the right to recover such compensation is the employee's exclusive remedy against the employer for such injuries. (§ 3602.)

An employer has the duty to provide its employees a safe place of employment. (§ 6400 et seq.) The Workers' Compensation Act (§ 3200 et seq.) compensates employees for injuries arising out of unsafe work place conditions, including enhanced compensation under section 4553 in cases involving serious and willful employer misconduct. (Royster v. Montanez (1982) 134 Cal.App.3d 362, 371, 184 Cal.Rptr. 560.) Workers' compensation is the sole remedy for an employee injured by the employer's failure to provide a safe work place. (Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 474-475, 165 Cal.Rptr. 858, 612 P.2d 948; Royster v. Montanez, supra, 134 Cal.App.3d at p. 371, 184 Cal.Rptr. 560.)

Spratley concedes workers' compensation was her exclusive remedy to recover damages for physical injuries occurring during her employment. However, Spratley contends the court erred in sustaining Winchell's demurrer to her cause of action for Spratley's pleading essentially alleged that to induce her to accept employment Winchell fraudulently represented her work place would be safe. Such allegation does not avoid the exclusivity provisions of the Workers' Compensation Act. (Wright v. FMC Corp. (1978) 81 Cal.App.3d 777, 779, 146 Cal.Rptr. 740.) Further, Spratley first sustained injury resulting from Winchell's alleged fraud and discovered such alleged fraud only during the employment relationship and such injury arose out of and in the course of the employment relationship. (See generally 5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 680, p. 131; Code Civ.Proc., § 338, subd. (4).)

Winchell's fraudulently inducing her to accept employment. Spratley asserts workers' compensation is not the exclusive remedy for an employer's tort committed before the employment relationship began; she asserts the superior court should have allowed her a civil remedy for the fraud injury occurring before the employment relationship began and not arising out of the employment relationship.

In Wright v. FMC Corp., supra, 81 Cal.App.3d 777, 146 Cal.Rptr. 740, the superior court sustained without leave to amend an employer's demurrer to an employee's pleading alleging the employer knew the job involved contact with noxious chemicals but concealed and misrepresented the hazard to induce him to accept employment. On appeal the employee contended such allegation avoided the exclusivity provisions of the Workers' Compensation Act. The appellate court rejected the employee's contention, finding the fact the employee based his case upon the employer's alleged deceit was immaterial.

Spratley contends Wright should not control here because, unlike the employee in Wright, she did not seek workers' compensation recovery from her employer for the injury asserted in her lawsuit. However, Spratley's contention is based upon an inaccurate characterization of Wright. The appellate court in Wright affirmed the sustaining of the demurrer not because the employee sought duplicate recovery but rather because section 3600 et seq. made workers' compensation the exclusive remedy. Wright controls here. The exclusive remedy provisions of the Workers' Compensation Act bar Spratley's purported cause of action against Winchell for fraudulent inducement.

In Wright v. FMC Corp., supra, 81 Cal.App.3d 777, 146 Cal.Rptr. 740, the employee alleged the employer concealed dangers inherent in materials used in his work. In Buttner v. American Bell Tel. Co. (1940) 41 Cal.App.2d 581, 107 P.2d 439, the employee alleged the employer falsely represented material used in his work was safe. In Williams v. International Paper Co. (1982) 129 Cal.App.3d 810, 181 Cal.Rptr. 342, the employee alleged the employer intentionally failed to correct hazardous working conditions despite knowing an injurious explosion was substantially certain to occur. In United States Borax & Chemical Corp. v. Superior Court (1985) 167 Cal.App.3d 406, 213 Cal.Rptr. 155, the plaintiffs alleged the employer intentionally misrepresented working conditions would be safe. In each case workers' compensation was held to be the exclusive remedy and the employer's intentional act did not justify an action at law. In discussing Wright and Buttner, the California Supreme Court wrote:

"The reason for the foregoing rule seems obvious. It is not uncommon for an employer to 'put his mind' to the existence of a danger to an employee and nevertheless fail to take corrective action. [Citation.] In many of these cases, the employer does not warn the employee of the risk. Such conduct may be characterized as intentional or even deceitful. Yet if an action at law were allowed as a remedy, many cases cognizable under workers' compensation would also be prosecuted outside that system. The focus of the injury in a case involving work-related injury would often be not whether the injury arose out of and in the course of employment, but the state of knowledge of the employer and the employee regarding Spratley contends the court should have overruled Winchell's demurrer to her cause of action for fraudulent inducement because she sought damages only for mental suffering and emotional distress and such damages are not recoverable under workers'...