Watson v. Department of Rehabilitation

• Decision Date: 08 August 1989
• Docket Number: No. B029148,B029148
• Citation: 212 Cal.App.3d 1271,261 Cal.Rptr. 204
• Court: California Court of Appeals Court of Appeals
• Parties: , 53 Fair Empl.Prac.Cas. (BNA) 1203, 56 Empl. Prac. Dec. P 40,626 Joyce WATSON, Plaintiff-Respondent-Cross-Appellant, v. DEPARTMENT OF REHABILITATION, Defendant-Appellant-Cross-Respondent.

Page 204

261 Cal.Rptr. 204

212 Cal.App.3d 1271, 53 Fair Empl.Prac.Cas. (BNA) 1203,

56 Empl. Prac. Dec. P 40,626

Joyce WATSON, Plaintiff-Respondent-Cross-Appellant, v. DEPARTMENT OF REHABILITATION, Defendant-Appellant-Cross-Respondent.

No. B029148.

Court of Appeal, Second District, Division 7, California.

Aug. 8, 1989.

Review Denied Nov. 2, 1989.

Jerry L. Webb & Associates and Jerry L. Webb, Encino, for plaintiff-respondent-cross-appellant

John K. Van de Kamp, Atty. Gen., Henry G. Ullerich, Supervising Deputy Atty. Gen., and Thomas Scheerer, Deputy Atty. Gen., for defendant-appellant-cross-respondent.

NEWMAN, Associate Justice, Assigned. ^*

The State of California Department of Rehabilitation (State and agency) appeals from a judgment awarding Joyce Watson (Watson), a civil service employee of the State, damages of $1,500,000 after a jury trial. Watson proceeded to trial on two statutory causes of action for race and age discrimination in violation to Government Code sections 12940 and 12941, and a third cause of action for breach of the covenant of good faith and fair dealing. The State seeks reversal of the judgment and dismissal of the action; alternatively a remittitur limiting the damages award or a new trial. Although we agree with the State that damages for breach of the covenant of good faith and fair dealing may not be recovered by this state employee, we affirm the judgment on the statutory causes of action and find that they support the damages found and awarded by the jury.

PROCEDURAL HISTORY

Watson sought a promotion from her clerical position of intake clerk to vocational rehabilitation assistant in a promotional examination given in August 1977. She did not receive the promotion; the position went a Caucasian. Watson filed a charge on March 28, 1978 with the Department of Fair Employment Practices (DFEP) alleging that the denial of promotion was based on her race. She received a "right-to-sue" letter from the DFEP on August 31, 1978. Thereafter on January 8, 1979, Watson filed suit alleging violation of former Labor Code section 1420, the predecessor of Government Code section 12940. In one cause of action, Watson sought injunctive relief and damages of $100,000. She described herself as Mexican-American and Asian-American in that complaint. The defendants, the State and Susanne Davis (Davis), who was District Administrator for the agency, demurred. On April 30, 1979, Watson filed a first amended complaint again naming the State and Davis, seeking an unspecified sum of damages for lost wages and retirement benefits. Defendants again demurred. On June 6, 1979, the trial court overruled the demurrer but struck Davis as a defendant. Watson filed a second amended complaint on June 20, 1979 naming only the State as a defendant. An answer was filed. Trial was ultimately set for October 17, 1985.

The parties reached a stipulation in the trial court on October 23, 1985 taking the matter off calendar so that Watson could file a second charge with the Department of Fair Employment and Housing (DFEH) and then her third amended complaint. The parties stipulated that Watson could file a third amended complaint to avoid On May 16, 1986, Watson filed her fourth amended complaint alleging four causes of action, including two statutory causes of action for race and age discrimination, a cause of action for breach of the covenant of good faith and fair dealing, and a cause of action for intentional infliction of emotional distress. Watson again named Davis and the two other supervisors as individual defendants, and again sought compensatory and punitive damages as well as injunctive relief. On June 9, 1986, the defendants again demurred and moved to strike. On July 1, 1986, the trial court again overruled the demurrers, and ordered Davis, Nitta and Rainey stricken as defendants, as well as the allegation and prayer seeking punitive damages.

filing a separate lawsuit seeking damages for the campaign of retaliatory harassment she alleged was initiated by Davis in response to her original DFEP charge and lawsuit. Watson filed her second charge with the DFEH on December 6, 1985 setting forth a number of actions which she asserted to be harassment in retaliation for her original charge of discrimination. She received a "right to sue" letter on January 24, 1986. On January 29, 1986 Watson filed her third amended complaint. She named the State, Davis and two other supervisors, Miye Nitta (Nitta) and Willie Rainey (Rainey) as defendants and alleged six causes of action seeking compensatory and punitive damages. In response, the State moved to strike Davis and Does as defendants and again demurred. On May 7, 1986, the trial court overruled demurrers to the first four causes of action, sustained a demurrer to the cause of action for conspiracy, and granted motions to strike Davis, Nitta and Rainey as defendants, and the claim for punitive damages.

The State filed its answer raising as affirmative defenses claims previously presented by way of demurrer and overruled. On July 31, 1986, plaintiff filed her fifth amended complaint, apparently because the trial court on July 1, 1986 mistakenly instructed Watson to file still another amended complaint rather than ordering the State to answer as it apparently intended.

The State again moved to strike--this time the fifth amended complaint--on August 6, 1986. On October 22, 1986, the trial court struck the fifth amended complaint and allowed the State 30 days to answer. It again filed the same answer it filed previously in response to the fourth amended complaint.

On November 25, 1986, Watson filed her at-issue memorandum listing $1,000,000 in general damages, $25,000 in special damages and $1,000,000 in punitive damages. The matter was set for trial on March 16, 1987. The State agreed to withdraw all objections to the complaint except that based on Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 233 Cal.Rptr. 308, 729 P.2d 743. At trial various defense motions in limine were denied. The State moved for judgment on the pleadings, citing Cole. The trial court granted the motion in part, dismissing the emotional distress cause of action but denying dismissal of the good faith and fair dealing cause of action.

After trial, the jury brought in a general verdict in favor of Watson for $1,500,000. The State moved for a new trial on several grounds, including excessive damages. The trial court denied the motion. The State appealed and Watson cross-appealed asserting the trial court erred in striking the individual defendants and the punitive damages allegation and prayer. Subsequently, Watson conditionally abandoned her cross-appeal if the judgment was to be affirmed.

FACTUAL HISTORY

We state the facts in the light most favorable to the judgment, giving the prevailing party the benefit of every reasonable inference and resolving conflicts in support of the judgment. (Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429, 45 P.2d 183.) Although the foregoing is elementary black letter law, we reiterate it at the outset of our factual recitation because the State in essence asks that we resolve the considerable evidentiary conflicts Watson is a female of mixed Mexican, Asian and black ancestry. She was employed by the State as an intake clerk in January 1972. Although she worked in a clerical position, her goal was to become a vocational rehabilitation counselor. Fellow employees considered her a hard worker; her supervisors were satisfied with the quantity and quality of her work; she was polite, compassionate and helpful to clients. Watson was entitled to laterally transfer from her clerical position to the entry level professional position of vocational rehabilitation assistant (VRA) upon passing an examination.

in its favor, contrary to our obligation under the law.

Davis became district administrator for the agency district in which Watson worked in the fall of 1975. Davis announced a promotional oral examination for the VRA position to be held in August 1977. Originally Davis told Watson the examination would be limited only to employees from the district. Subsequently, Davis announced the examination would be open to employees from other districts of the agency, and to non-permanent employees, such as Laurel Dann (Dann), a Caucasian CETA ¹ employee who suffered from a disability.

The procedure for previous similar examinations was to place the examinees on a promotional list based on their performance. They would then be grouped in "ranks" of two or more. Those in the top three ranks would be interviewed again before the final choice was made. This was the "rule of three" required under civil service rules. Davis had told Watson the group of three procedure would be utilized and those in the top three ranks would be further interviewed. The head of the examination group, Barry Hacker, corroborated that such procedure would be followed.

Just before the examination, however, Davis announced she would chose whomever came in first in the examination, bypassing the additional interview process, a virtually unprecedented departure from the normal procedure. During the examination, Davis was observed by Watson and another black examinee to be coaching Dann. Dann emerged first among the twelve examinees on the promotional list. Watson was rated fifth, but moved to third when two above her withdrew their applications for the position.

The affirmative action program of the agency for any branch under parity for a particular minority group required that a person from that minority group be chosen if such there was in the top three ranks. For a six-months' period ending in 1978, Davis' Inglewood branch office was under parity by two Hispanics.

Davis chose Dann for the position. Watson responded by protesting the entire examination process to Davis. She complained to her union, the Clerical and Allied Services Employees Union; she wrote to the...