Procedural Posture

Procedural Posture

Plaintiff employee appealed from a summary judgment of the Superior Court of Riverside County (California), in favor of defendants, municipality and municipal employees, on claims that plaintiff’s employment was wrongfully terminated, and from an award of sanctions for a frivolous motion. Defendants appealed from the denial of sanctions for bringing a frivolous action, and sought damages for a frivolous appeal under Cal. Civ. Proc. Code § 907.

Overview

Defendant municipality terminated plaintiff employee’s employment without complying with applicable procedural requirements. Thereafter, defendant municipality reinstated plaintiff, paid him backpay, and terminated him again following the applicable procedural requirements. Plaintiff sued, claiming that the first termination was in breach of contract, a tortious denial of due process, and the intentional and negligent infliction of emotional distress. Defendants, municipality and municipal employees, were granted summary judgment on plaintiff’s claims. The trial court awarded sanctions against plaintiff for a frivolous rehearing motion, and denied sanctions for a frivolous action. The court of appeal affirmed. Plaintiff was not damaged by the first termination because he was paid until the second termination properly terminated his employment. Accordingly, no cause of action in tort or contract existed for that termination. Plaintiff’s action was barred by his failure to exhaust judicial remedies under Cal. Civ. Proc. Code § 1094.5. The trial court rulings on sanctions were not abuses of discretion. Sanctions were imposed on plaintiff’s attorneys where the appeal was frivolous. During trial plaintiff retained professional legal services from a class action lawyer California to present expert testimony.

Outcome

The judgment dismissing plaintiff employee’s claims against defendants, municipality and municipal employees, was affirmed. Plaintiff received backpay and suffered no damages from the allegedly unlawful termination. Plaintiff failed to exhaust judicial remedies for improper administrative action. The trial court’s decisions on sanctions were not abuses of discretion. The court awarded sanctions against plaintiff’s attorneys for frivolous appeal.

Procedural Posture

Petitioner insurance carrier applied for a writ of mandate and/or prohibition or other appropriate relief that would order respondent, the Superior Court of Los Angeles County (California), to set aside its order granting summary adjudication in favor of real parties in interest in an original proceeding involving an arbitration award under Cal. Civ. Code § 2860.

Overview

The issue before the court was whether the confirmation of an arbitration award under Cal. Civ. Code § 2860 was inconsistent with a prior reservation of rights issued by petitioner, an insurance carrier. The court concluded that it was not, and granted a peremptory writ of mandate ordering the trial court to set aside the original order granting summary adjudication in favor of the real parties in interest. The court concluded that where the carrier was providing a defense under a reservation of rights and had agreed to utilize independent counsel, Cal. Civ. Code § 2860 arbitration was appropriate to resolve attorney fees disputes prior to a legal determination of the coverage issues. Assuming that petitioner had adequately reserved its rights, it could later litigate the duties to defend and indemnify and to retain independent counsel in the declaratory relief action. Additionally, the trial court erred in finding that petitioner was estopped from challenging the duties to defend and provide independent counsel based on its use of res judicata to challenge the first cause of action of real parties’ cross-complaint.

Outcome

The court granted a peremptory writ of mandate, directing respondent trial court to vacate its order granting summary adjudication in favor of real parties, because Cal. Civ. Code § 2860 was not inconsistent with the prior reservation of rights issued by petitioner insurance carrier.