Traub v. Board of Retirement

• Decision Date: 20 October 1983
• Citation: 195 Cal.Rptr. 681,34 Cal.3d 793,670 P.2d 335
• Court: California Supreme Court
• Parties: , 670 P.2d 335 Richard Philip TRAUB, Plaintiff and Appellant, v. BOARD OF RETIREMENT OF the LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION, Defendant and Respondent. L.A. 31713.

Page 681

195 Cal.Rptr. 681

34 Cal.3d 793, 670 P.2d 335

Richard Philip TRAUB, Plaintiff and Appellant, v. BOARD OF RETIREMENT OF the LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION, Defendant and Respondent.

L.A. 31713.

Supreme Court of California,

In Bank.

Oct. 20, 1983.

Rose, Klein & Marias, Marvin N. Shapiro, David A. Rosen and Eugene Marias, Los Angeles, for plaintiff and appellant.

Allan S. Ghitterman, Santa Barbara, as amicus curiae on behalf of plaintiff and appellant.

John H. Larson, County Counsel, and Owen L. Gallagher, Deputy County Counsel, Los Angeles, for defendant and respondent.

GRODIN, Justice.

In this appeal from denial of a writ of mandate, plaintiff seeks to compel the Board of Retirement of the Los Angeles County Employees Retirement Association (Board or Retirement Board) to grant him a retirement allowance for service-connected disability. The trial court found that he was psychiatrically incapacitated for work because of stress resulting from the county's unsuccessful attempt to dismiss him for dealing in illegal drugs, but concluded that the incapacity was not service-connected because it did not "aris[e] out of and in the course of his employment" as required by Government Code section 31720. ¹ The issue is whether disability from an employer's investigation of, and dismissal for, employee wrongdoing is service-connected when (1) proof of the charges would establish misconduct outside the scope of employment but (2) the charges are not proved and the dismissal is set aside.

We conclude that psychiatric injury resulting from an employer's investigation of ultimately unproved charges against an employee arises out of and in the course of the employment whether or not the alleged misconduct was within the scope of employment. Accordingly, we reverse.

Factual and Procedural Background

In 1963 plaintiff began work for Los Angeles County as a deputy probation officer and became a member of the retirement system administered by the defendant Board. He supervised youth offenders and in 1969 was assigned to the after-care unit, working with boys who were on probation after release from camp.

In June 1974 he received a call from a former camp inmate whom he had counseled nine years earlier. The young man visited plaintiff at his office during the lunch hour and phoned again a few days later. During those conversations there was discussion of drugs, but plaintiff claims he pursued that topic simply to keep open the possibility of assisting the young man with personal problems.

In July 1974 plaintiff heard from fellow staff members that there was a tape recording of someone in the office arranging a drug sale. He went to his supervisor with notes of his conversations with the young man about drug traffic, but the supervisor said he need not turn in his notes since the matter would be dropped. In August, however, he was summoned by the supervisors, interrogated, and required to take polygraph tests.

On November 25, 1974, plaintiff was dismissed for negotiating a sale of drugs to a federal enforcement agent. He was told that the polygraph test did not absolve him and learned also that the young man with whom he had talked had committed suicide.

There ensued a lengthy review of the dismissal. A referee heard evidence and in September 1975 upheld plaintiff's termination. The civil service commission refused to disturb that decision, but in September 1976 the superior court ordered the commission to rehear the matter. In October 1976 the commission ordered plaintiff reinstated with back pay. After further administrative review, plaintiff returned to work in December 1976.

On reinstatement, plaintiff asked to be assigned to his former duties but instead was directed to work with adult heroin addicts. He was unable to adjust to the job, took vacation time, and did not return to county employment.

In October 1977 plaintiff applied for a service-connected disability pension, claiming psychiatric disability. The Board determined that plaintiff was disabled but granted only the lesser retirement allowance for disability that is not service-connected. An evidentiary hearing to review the Board's decision was held in April 1979 before a referee, who in June 1979 recommended that the Board adhere to its original decision. The Board adopted that recommendation in August 1979, and in September 1980 plaintiff commenced the present mandate proceeding.

The trial court entered judgment against plaintiff in December 1980. The court properly undertook to base its findings on its independent judgment of the weight of the evidence in the administrative record. (Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 45-46, 112 Cal.Rptr. 805, 520 P.2d 29.) The court found that as a result of plaintiff's dismissal in November 1974, he "became very upset, anxious, angry, and depressed from the time the investigation began and more severely so after he was fired," that he had been "medically diagnosed as 'chronic severe traumatic depressive neurosis with phobic and obsessive features, reactive to the stress of being unfairly dismissed from work and having to be reinstated,' " and that he "is permanently disabled from duty due to a psychiatric condition." But the court also found that "[t]he stress suffered by [plaintiff] arose out of the termination, not from the job activities," and that his "incapacity is not a result of injury or disease arising out of and in the course of his employment within the meaning of Government Code Section 31720." The court concluded that plaintiff "is not entitled to a service-connected disability retirement allowance."

Discussion

I.

Plaintiff contends that the required connection between disability and employment was conclusively established, under res judicata principles, by a decision of the Workers' Compensation Appeals Board (WCAB) in February 1979 awarding him benefits from the County of Los Angeles for "injury to his emotional state from Dec. 10, 1972 through Dec. 10, 1976." A copy of the award was submitted to the trial court, and at least two of the three psychiatrists who prepared the medical reports considered by the court appear to have based their conclusions on their examinations of plaintiff in connection with the workers' compensation claim.

Under the collateral estoppel aspect of res judicata, the litigation and determination of an issue by final judgment is conclusive upon the parties or their privies in a subsequent suit on a different cause of action. (Bernhard v. Bank of America (1942) 19 Cal.2d 807, 122 P.2d 892; Jackson v. City of Sacramento (1981) 117 Cal.App.3d 596, 601, 172 Cal.Rptr. 826.) A final determination by the WCAB is a final judgment for collateral estoppel purposes. (French v. Rishell (1953) 40 Cal.2d 477, 254 P.2d 26; Dakins v. Board of Pension Comrs. (1982) 134 Cal.App.3d 374, 184 Cal.Rptr. 576.) It is unnecessary for us to decide whether a determination of compensability necessarily implies that the injury would qualify as the basis for service-connected disability retirement benefits under section 31720 (fn. 1, ante ) because the requisite privity between the county, against which the award was made, and the county Retirement Board, appears to be lacking.

In French v. Rishell, supra, we found the requisite privity between the City of Oakland and its Board of Trustees of the Firemen's Relief and Pension Fund since, under that city's charter, "the pension board acts as an agent of the city, and, in this representative capacity, it is bound by the [Industrial Accident] [C]ommission's decision if the city is bound." (40 Cal.2d at p. 482, 254 P.2d 26.) A county retirement board, by contrast, does not act as agent for the county, but as administrator of the county retirement system, an independent entity established pursuant to the County Employees Retirement Law of 1937. (§ 31450 et seq.) The constituency of that entity is not limited to county employees, but may include employees of various political subdivisions and districts within the county. ² Funding for the system comes both from the governmental employers and from the employees on an actuarial basis, so that any adjudication of a claim for benefits may have economic impact upon the membership of the association as well as upon the treasury of the county and participating political entities. (§§ 31453-31454.6.) The Courts of Appeal have consistently held that a county retirement board is not bound by adjudication of a workers' compensation claim against the county because the privity requisite to application of collateral estoppel principles does not exist. (Grant v. Board of Retirement (1967) 253 Cal.App.2d 1020, 1021, 61 Cal.Rptr. 791; Petry v. Board of Retirement (1969) 273 Cal.App.2d 124, 129, 77 Cal.Rptr. 891; Summerford v. Board of Retirement (1977) 72 Cal.App.3d 128, 132, 139 Cal.Rptr. 814; Preciado v. County of Ventura (1983) 143 Cal.App.3d 783, 192 Cal.Rptr. 253; see also, Flaherty v. Board of Retirement (1961) 198 Cal.App.2d 397, 402-404, 18 Cal.Rptr. 256.) The distinctive identity, constituency and interests of a county retirement system support that rule, and we follow it here. ³

II.

Disability from emotional stress caused by psychological pressures imposed by an employer is ordinarily service-connected if based on the employer's dissatisfaction with the employee's job performance. (Albertson's, Inc. v. Workers' Comp. Appeals Bd. (1982) 131 Cal.App.3d 308, 182 Cal.Rptr. 304.) It is undisputed that plaintiff is disabled from working at his former job, and that his disability is due to stress arising out of the investigation of the charges against him, his purported termination, his subsequent efforts to obtain reinstatement, or some combination of these factors. The trial court concluded, however, that his disability was not service-connected because the charged conduct consisted of illegal activity outside the scope of employment. ...