School accepting money from the state is subject to the False Claims Act and is liable for wrongful termination.
Cite as
1998 DJDAR 12753Published
Apr. 14, 1999Filing Date
Dec. 13, 1998Summary
The C.A. 2nd has ruled, in the published portion of the opinion, that a public school district was subject to a claim of wrongful termination under the False Claims Act when it was implicated in mishandling state money earmarked for the pupils.
Robert LeVine was a teacher employed by the Ventura County Superintendent of Schools (VCSS). LeVine was assigned to the maximum security unit of the McBride school at Ventura County Juvenile Hall. There were between 40 and 80 students in four separate locked classrooms. LeVine was the only teacher. After LeVine complained to his supervisors that the money needed to hire extra staff was not being used properly, he was terminated. After a grievance process, LeVine sued, alleging several causes of action including wrongful termination. LeVine argued that he was fired in violation of Government Code, section 12653(b), part of the False Claims Act. The trial court granted VCSS' summary judgment motion.
The C.A. 2nd reversed in part and affirmed in part. Section 12653 states that "[N]o employer shall discharge . . . an employee because of lawful acts done by the employee . . . in disclosing information to a government or law enforcement agency . . . in furthering a false claims action. . . ." At a meeting with the school's principal, LeVine stated that he was going to report the school's staffing problems to the district's superintendent. LeVine was ordered to go home and accused of having emotional problems. He was later fired when a settlement could not be reached during the grievance process. VCSS contended that its actions were not retaliatory in nature. The question as to whether VCSS retaliated was a triable issue of fact. Because VCSS had the burden of proving no such triable issues of fact existed, the trial court erred in granting the summary judgment motion. In the unpublished portion of the opinion, VCSS' motion for summary judgment based upon Section 911.2 was properly denied. This statute states that a plaintiff has six months in which to file a claim against the government. LeVine properly argued that the statute was tolled while he pursued his claims through the grievance process. Additionally, the trial court erred in not granting summary judgment on VCSS' claim that LeVine was barred from bringing a breach cause of action. LeVine held a provisional teaching credential. His employment was fixed by statute and not contract. Further, the trial court properly granted summary judgment for VCSS based upon its contentions that LeVine was prevented from bring an action based upon non-statutory wrongful termination. A public employee isn't liable for any harm caused by when the employee institutes or processes a judicial proceeding within the scope of his employment, regardless of whether he instituted that proceeding maliciously or without probable cause.
— Brian Cardile
ROBERT LeVINE,
Plaintiff and Appellant,
v.
CHUCK WEIS, as Superintendent, etc., et al.,
Defendants and Appellants.
2d Civil No. B115091
(Super. Ct. No. CIV 166686)
(Ventura County)
California Court of Appeal
Second Appellate District
Division Six
Filed December 14, 1998
CERTIFIED FOR PARTIAL PUBLICATION*
Plaintiff, a school teacher, complains to his superiors that his classrooms are unlawfully understaffed. He is terminated and brings an action alleging, among other causes of action, wrongful termination under the False Claims Act. (Gov. Code, § 12650 et seq.) The trial court grants summary adjudication in favor of defendants. Later plaintiff's entire action is dismissed.
Here we hold that the False Claims Act applies to governmental entities. We therefore reverse the grant of summary adjudication for the cause of action based on the False Claims Act. In all other respects, we affirm.
FACTS Robert LeVine was employed as a teacher by the Ventura County Superintendent of Schools (hereinafter "VCSS") for approximately three and a half years. He held an emergency credential that expired annually. He was assigned to the McBride School at Ventura County Juvenile Hall. He worked in the "unit school" for maximum security inmates.
LeVine was the only teacher for between 40 to 80 students spread among 4 locked classrooms. In a memorandum dated August of 1994, LeVine complained to VCSS about understaffing. Levine raised these concerns at a McBride School staff meeting on December 14, 1994. The meeting was attended by the school principal, Dale Strayhorn.
Shortly thereafter LeVine received a memorandum from Strayhorn. The memorandum referred to the December 14 meeting. It stated in part: "During this meeting you participated in a discussion regarding coverage in Unit School. The discussion primarily involved you and me, and it lasted for approximately twelve minutes. [¶] During this discussion you made some statements that I felt were inappropriate. You stated you were not going to discuss the topic with me further, that I am incompetent to resolve the budget issue pertaining to hiring another personnel [sic] for Unit School, and that you were going directly to the Assistant Superintendent, Sandi Shackelford, the Superintendent, Dr. Charles Weis, and then to the State Department for a resolution; therefore, stipulating that you find it unnecessary to problem solve with me, Site Administrator, to coordinate procedures that will insure quality and safe educational program in Unit School." The memorandum stated that it would be placed in LeVine's personnel file.
On December 20, 1994, LeVine met with Strayhorn and Cary Dritz, Director of Human Resources for VCSS. The meeting was recorded. During the meeting Strayhorn told LeVine: "I have [sic] conversations with Correctional staff this morning and in the conversations, uh, they feel that you are, uh, irrational, you're showing an irrational behavior, and because of that we're going to ask you to go home on sick leave the rest of this week and for you to return we're going to ask that you request, uh, from your doctor a note saying that you are capable of coming back to work."
LeVine stated: "[A]s far as people making statements about me, I'd like to hear it to my face." Dritz replied: "It doesn't always work that way."
LeVine filed grievances on January 3, and 5, 1995, complaining about "retaliatory action taken for expressing his views at the 12/14/94, meeting." LeVine claimed in his grievance that at the December 14 staff meeting, "I stated over and over that I wanted a reason why these kids should be deprived of an instructor in the room when clearly they were bringing in the funding to easily pay for some desperately needed, long documented, staff help."
On January 9, 1995, LeVine attended a meeting with Dritz and Chris Meagher, the teachers' bargaining unit representative. The purpose of the meeting was to resolve LeVine's grievance and to work out terms under which he could return to work.
Meagher and Dritz believed an agreement was reached at the meeting. A letter sent by Dritz to LeVine recited that LeVine had agreed to abide by the following "expectations": "1. Able to remain calm in crisis. 2. Listen actively without becoming defensive or authoritarian. 3. Avoid win-lose conflicts. 4. Maintain a problem-solving orientation rather than resorting to withdrawal, blaming, hysteria or other emotional over-reactions. 5. Be courteous and considerate at all times. Convey professional demeanor. 6. Show respect for people in authority, even if you do not always agree with them. 7. Maintain a spirit of collegiality and promote a professional partnership with site administrator. 8. Report all problems and concerns to the site administrator. 9. Communicate regularly with the site administrator."
The letter also agreed that VCSS personnel would meet with LeVine within five days to, among other matters, "[r]esolve staffing issues at McBride School." The letter stated LeVine would be expected to return to work on February 6, 1995. If LeVine agreed he was to sign and return a copy of the letter by January 16, 1995.
LeVine denied that any such agreement had been reached. He wrote a letter to Dritz dated January 13, 1995, stating that Dritz's letter had been referred to LeVine's attorney for formal response. LeVine's letter stated in part: "[W]hile certain aspects of your communication were within a range that would permit further discussion, certain matters were omitted, and others in need of elaboration and clarification . . . ." The letter from LeVine's attorney stated, among other matters, that the staffing problem should be addressed prior to LeVine's return to work; that is, "what additional coverage is to be provided . . . within what time frame?"
LeVine testified in a deposition that Dritz was calling him at home "trying to badger me into coming back" to work. Then LeVine said, "I'm not saying he was trying to get me to come back to work at all. I don't know what was in Mr. Dritz's mind." LeVine said the essence of the telephone calls was that "[Dritz] was trying to force me to accept conditions that were demeaning, degrading and illegal . . . ."
Dritz wrote LeVine's attorney a letter dated January 23, 1995. The letter stated in part: "Mr. Levine will either return to work on or before January 23, 1995, [sic] and be in compliance with the directives of the January 9, 1995, memorandum or we will consider that he is absent without leave, failing to follow the direct orders of the Ventura County Superintendent of Schools Office abandoning his position with the Ventura County Superintendent of Schools Office."
LeVine testified that he received the letter after January 23, 1995. He said that when he received the letter he believed the "door had been shut" on his return to work. On February 7, 1995, LeVine received a letter from VCSS confirming that his employment had been terminated.
[[Nevertheless, the parties agreed to mediation before a state mediator. Mediation took place on June 30, 1995. On July 11, 1995, LeVine's attorney wrote to the mediator informing him that LeVine decided not to accept the mediator's proposed solution. On November 6, 1995, VCSS's attorney wrote to LeVine's attorney offering to facilitate a closed-door meeting with the board of education and a private meeting with the superintendent of schools. LeVine filed a government tort claim on January 30, 1996, and the instant action for breach of contract and wrongful termination on August 16, 1996.]]
VCSS made a motion for summary judgment or in the alternative, for summary adjudication. [[The motion was partially based on the theory that LeVine had no contractual right to continued public employment. It was also based on the theory that he had abandoned his job, had failed to make a timely claim under the Tort Claims Act and had failed to exhaust his administrative remedies.
Among the documents in support of its motion, VCSS submitted the declaration of Chris Meagher, President of the Federation of School Employees. Meagher declared that LeVine was a member of the bargaining unit represented by the federation. Meagher stated that according to the grievance procedure provided in the master agreement between the federation and VCSS, LeVine had until January 16, 1995, to request the federation to submit his grievance to binding arbitration. LeVine made no such request. Although Meagher's declaration states that a copy of the grievance procedures are attached, no such copy appears in the record on appeal. LeVine objected to Meagher's declaration as containing conclusions of law.
The trial court found triable issues of fact relating to the contentions that LeVine failed to exhaust administrative remedies and failed to file a timely claim. The court also found triable issues of fact relating to LeVine's cause of action for breach of contract.]] The trial court granted summary adjudication [[however,]] on the causes of action sounding in unlawful termination. [[The court found, among other matters, that LeVine had abandoned his job.
LeVine filed a motion for reconsideration of the summary adjudication. The motion for reconsideration included a copy of a grand jury report. The grand jury found that the unit school is understaffed; that the Education Code (§ 48645.3) requirement of 240 minutes of instruction per pupil per day was not being met; and that although the unit school generates the full $5,300 per pupil from the state, it actually receives less money than it generates. The trial court denied the motion for reconsideration. 1
LeVine's remaining cause of action for breach of contract was scheduled for trial on July 14, 1997. LeVine's attorney, Glenn J. Campbell, intended to try the case. On the morning of July 14, an associate in Campbell's firm received notice that the case was trailing on four-hour notice. The associate requested a continuance, pointing out that Campbell was in arbitration that had been ordered by the trial court in another matter. The court ordered trial to begin at 9 a.m. the following morning.
Campbell appeared at 9 a.m. and requested a continuance or a stay in the arbitration proceedings. The trial court denied both requests. When Campbell said he was not ready to proceed, the trial court dismissed the case for failure to prosecute. LeVine appeals and VCSS cross-appeals.]]
DISCUSSION Summary judgment or summary adjudication is properly granted only where there is no triable issue of fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subds. (c) & (f).) Where the defendant is the moving party, it bears the burden of showing that one or more elements of the cause of action cannot be established or that there is a complete defense. (Villa v. McFerren (1995) 35 Cal.App.4th 733, 743-745.) Unless the defendant meets its burden, plaintiff has no obligation to demonstrate that there is a triable issue of fact. (Ibid.)
I. LeVine contends the trial court erred in granting summary adjudication as to his cause of action based on Government Code section 12653.
Section 12653 of the Government Code is part of the False Claims Act. The False Claims Act concerns claims made against the state or any of its political subdivisions for money, property or services. (Gov. Code, § 12650, subd. (b)(1).) The False Claims Act provides for civil penalties against a person who, among other matters, "[k]nowingly presents or causes to be presented to an officer or employee of the state or of any political subdivision thereof, a false claim for payment or approval." (Gov. Code, § 12651, subd. (a)(1).)
Government Code section 12653, subdivision (b) provides: "No employer shall discharge, demote, suspend, threaten, harass, deny promotion to, or in any other manner discriminate against, an employee in the terms and conditions of employment because of lawful acts done by the employee on behalf of the employee or others in disclosing information to a government or law enforcement agency or in furthering a false claims action, including investigation for, initiation of, testimony for, or assistance in, an action filed or to be filed under Section 12652 [to enforce the False Claims Act]."
The False Claims Act must be construed broadly so as to give the widest possible coverage and effect to the prohibitions and remedies it provides in Government Code section 12653. (Southern Cal. Rapid Transit Dist. v. Superior Court (1994) 30 Cal.App.4th 713, 724.)
Here VCSS, which has the burden on its motion for summary adjudication, does not dispute that it applied for and received money to operate the unit school from the state. Nor does it dispute that the state in return for its money expected adequate staffing at the unit school. The state was not getting what it was paying for. It takes no leap of imagination to conclude that LeVine's expressions of concern about inadequate staffing were within the protection of section 12653, subdivision (b), of the Government Code.
VCSS claims it is not a person within the meaning of the False Claims Act. But Government Code section 12650, subdivision (b)(5), defines person as "any natural person, corporation, firm, association, organization . . . business, or trust." The terms "association" and "organization" are broad enough to encompass VCSS.
It is true that other statutes containing similar definitions of "person" have been held not to apply to governmental entities. (See Santa Monica Rent Control Bd. v. Bluvshtein (1991) 230 Cal.App.3d 308, 318 [Unfair Practices Act, Bus. & Prof. Code, § 17201]; Penn v. City of San Diego (1987) 188 Cal.App.3d 636, 642 [Cartwright Act, Bus. & Prof. Code § 16702].) But the statutes involved in those cases, the Unfair Practices Act and the Cartwright Act, largely concern the regulation of private business. The False Claims Act is different from those statutes in that its purpose is to protect the public fisc.
The definition of "person" must be read in light of the context and purpose of the statute. There is no reason to conclude the Legislature intended that the protection afforded to the public treasury by the Act be denied merely because the entity raiding the treasury is a governmental entity.
The court in Southern California Rapid Transit District v. Superior Court, supra, 30 Cal.App.4th at page 724, gave the False Claims Act a broad construction so as to give it the widest possible coverage. The court there was referring to acts that come within the scope of the statute. The broad interpretation should also apply to the person or entity committing the alleged fraud. We give the Act such an interpretation here. The most likely way that fraud perpetrated by a governmental entity will be exposed is through governmental employees who see the fraud being committed.
VCSS relies on Community Memorial Hospital v. County of Ventura (1996) 50 Cal.App.4th 199, 209-211. There we determined that a county was not subject to the Unfair Practices Act (Bus. & Prof. Code, § 17000 et seq.) and could not be sued in its operation of a public hospital furnishing free care to indigents. That determination was based on the rule that governmental agencies are excluded from the general provisions of a statute only if their inclusion would result in an infringement upon sovereign powers. (Community Memorial Hospital, supra, at p. 210.)
A county may have the sovereign power to fulfill its duty to guard the public health free from regulations that govern ordinary business. But no governmental agency has the power, sovereign or otherwise, knowingly to present a false claim. The very notion is repugnant to how government should operate by and for the people. VCSS is subject to the False Claims Act.
VCSS argues our interpretation of the False Claims Act creates an "incongruous dilemma" where the state could be found liable to itself. VCSS cites Eaglesmith v. Ward (9th Cir. 1995) 73 F.3d 857, 860, for the proposition that a county office of education is a state agency and a money judgment would be satisfied out of state funds.
Eaglesmith concerns whether a county office of education is a state agency entitled to Eleventh Amendment immunity from suit in federal court. The court relied on Belanger v. Madera Unified School Dist. (9th Cir. 1992) 963 F.2d 248, in concluding that it was. Belanger determined that a school district was immune in part because any judgment would be satisfied out of state funds. The court reasoned that the state determines the amount of money the district may spend per pupil and then provides the funds. (Id., at p. 252.)
Contrary to VCSS's argument, the cases do not show that the state could be liable to itself. They only show that the state contributes to the school district's budget based on the number of pupils in the district. There is not even a showing that the state might be indirectly liable. VCSS cites no authority that would require the state to increase the school district's funding to pay for an adverse judgment in this case.
The question remains whether the evidence shows as a matter of law that LeVine's employment was not terminated in retaliation for his threats to inform the state about inadequate staffing. That LeVine made such a threat is confirmed by Strayhorn's memorandum of December 19, 1994. A reasonable trier of fact could determine the memorandum was disciplinary in nature both from its tone and from the statement that it would be placed in LeVine's personnel file.
The next day Strayhorn told LeVine that correctional staff reported he was acting irrationally. Strayhorn sent LeVine home until he could obtain a note from his doctor. VCSS produced no evidence that LeVine was acting irrationally or that anyone reported so to Strayhorn. In light of the lack of such evidence and the timing of the suspension, so soon after LeVine threatened to inform the state, a reasonable trier of fact could conclude the suspension was retaliatory.
LeVine filed a grievance. Dritz sent a letter stating that an agreement had been reached. LeVine denied that any agreement had been reached. VCSS' letter did not promise any specific remedy for the intolerable and illegal conditions that led LeVine to protest in the first place. LeVine testified in his deposition that Dritz was trying to badger him into returning to work under conditions that were "demeaning, degrading and illegal."
Finally, on January 23, 1995, Dritz sent a letter to LeVine's attorney requiring LeVine to return to work on the same day. There is no indication the letter could have arrived in time for LeVine to comply. VCSS claims the date stated in the letter was an obvious mistake. But a trier of fact who views VCSS' motive as retaliatory might not be so convinced. The record discloses no effort on the part of VCSS to correct any mistake.
The trial court erred in granting summary adjudication as to his cause of action based on Government Code section 12653. [[We need not consider the applicability of Government Code section 53296, an issue raised for the first time on appeal.
II. We agree with the trial court that LeVine's non-statutory causes of action for wrongful termination are barred by governmental immunity.
The court in Southern Cal. Rapid Transit Dist. v. Superior Court, supra, 30 Cal.App.4th at page 726, recognized that the application of governmental immunity to Government Code section 12653 would emasculate the effect and purpose of the statute. Causes of action for wrongful termination not based on statutes, however, have not fared so well.
In Shoemaker v. Myers (1992) 2 Cal.App.4th 1407, 1425, the court concluded that a non-statutory claim for wrongful termination of a public employee fell squarely within the immunities provided by Government Code section 821.6. Section 821.6 provides: "A public employee is not liable for injury caused by his instituting or prosecuting any judicial or administrative proceeding within the scope of his employment, even if he acts maliciously and without probable cause." The court pointed out that our Supreme Court has held that public employees are immune from liability under section 821.6 for malicious prosecution in connection with public employment termination proceedings. (Hardy v. Vial (1957) 48 Cal.2d 577.)
LeVine argues that immunity provided by Government Code section 820.2 does not apply because the termination of his employment was a ministerial act. Government Code section 820.2 provides immunity for a public employee's discretionary acts. LeVine's argument is fatally flawed in at least two respects. First, it says nothing about the immunity granted under Government Code section 821.6. Second, LeVine cannot seriously mean that the termination of his employment was a ministerial act in which VCSS' superintendent and administrators exercised no discretion. The decision to terminate a person's public employment involves a basic policy decision for which section 820.2 provides immunity. (Eldridge v. Sierra View Local Hospital Dist. (1990) 224 Cal.App.3d 311, 326.)
III. VCSS contends that LeVine's action is barred for failure to comply with Government Code section 911.2. That section requires a person asserting a cause of action against a public entity to file a claim not later than six months after the accrual of the cause of action. VCSS points out that LeVine's employment was terminated on February 7, 1995, but LeVine did not file a claim until January 30, 1996.
LeVine relies on the doctrine of equitable tolling. He claims the time limitation of Government Code section 911.2 was tolled while he was pursuing the grievance procedure established by the collective bargaining agreement.
The doctrine of equitable tolling applies when a person has several legal remedies and reasonably pursues one designed to lessen the extent of the injury or damages. (Loehr v. Ventura County Community College Dist. (1983) 147 Cal.App.3d 1071, 1084.) There is a three-pronged test for the invocation of the doctrine. (Id., at p. 1085.)
First, the filing of the first claim must provide the defendant in the second claim with timely notice of the need to begin investigating the facts. Here LeVine filed a grievance alleging that his suspension was retaliatory. A meeting was held to resolve the terms under which LeVine could return to work. It is true that the grievance was filed before LeVine's employment was terminated. But the termination of LeVine's employment was a direct result of the parties' inability to reach an agreement on the conditions of LeVine's return. Because the termination of LeVine's employment was directly related to matters raised by the grievance, the grievance was sufficient to provide VCSS with timely notice.
Second, the two claims must be sufficiently similar that defendant's investigation of the first claim will place it in a position to fairly defend the second. Here Levine claims his employment was terminated for the same reason he was suspended. Thus, the claims are sufficiently similar.
Third, plaintiff must have acted reasonably and in good faith in filing the second claim. VCSS argues that LeVine's delay in filing his claim for more than six months after the grievance proceeding had terminated shows bad faith. VCSS places the termination of the grievance proceeding on January 9, 1995, when an agreement was reached. But LeVine denies any such agreement was ever reached.
As an alternative, VCSS suggests January 16, 1995, when LeVine failed to seek arbitration. But the parties participated in mediation conducted by the state mediation service. That is also part of the grievance procedure. Moreover, there is evidence from which a reasonable person could conclude that neither side considered matters to have reached an impasse until well after January of 1995. As late as November 6, 1995, VCSS' attorney offered to facilitate a closed-door meeting with the board of education and a private meeting with the superintendent of schools.
VCSS also argues LeVine showed bad faith when he took actions that could mislead VCSS into believing he had abandoned his second claim. The actions to which VCSS points are LeVine's acceptance of his salary through January of 1995, and his attorney's request for mediation before a state mediator. Both actions, however, are simply consistent with LeVine's position that his treatment by VCSS was unlawful. They do not indicate an intent to abandon any claim.
The trial court did not err in refusing to grant summary judgment or adjudication based on Government Code section 911.2.
IV. The next question is whether LeVine failed to exhaust his administrative remedies. VCSS points out that LeVine had the right to resolve his grievance through binding arbitration.
The doctrine of exhaustion of administrative remedies requires a party to use all available administrative agency procedures before resorting to the courts for relief. (McHugh v. County of Santa Cruz (1973) 33 Cal.App.3d 533, 538.) But here it appears that the arbitration to which VCSS refers is the result of a contractual provision, not an administrative regulation. Chris Meagher of the Federation of School Employees declared "the Federation was . . . responsible for . . . processing grievances alleging 'a violation of the specific provisions of' the master agreement. . . . Mr. LeVine's right to challenge the employment actions of VCSS were [sic] contained within the grievance procedure of the master agreement between the Federation and VCSS."
VCSS cites no authority for the proposition that LeVine must exhaust contractual remedies prior to bringing an action under the False Claims Act. VCSS' reliance on Tielsch v. City of Anaheim (1984) 160 Cal.App.3d 570 is misplaced. The case does not involve contractual remedies nor does it involve the False Claims Act. VCSS points to nothing in the False Claims Act that requires an exhaustion of contractual or administrative remedies.
V. VCSS contends it was entitled to summary adjudication on LeVine's cause of action for breach of contract.
In Shoemaker v. Myers (1990) 52 Cal.3d 1, a public employee who alleged his employment was wrongfully terminated attempted to state a cause of action for breach of contract or breach of the implied covenant of good faith. The court concluded that a public employee cannot state such a cause of action. The court said, "[I]t is well settled in California that public employment is not held by contract but by statute and that, insofar as the duration of such employment is concerned, no employee has a vested contractual right to continue in employment beyond the time or contrary to the terms and conditions fixed by law. [Citations.]" (Id., at pp. 23-24.)
In an attempt to show a statutory right to continued employment, LeVine claims he qualified as a permanent employee under Education Code section 1296, subdivision (b). That subdivision grants permanent employee status to a person who "after being employed for two complete consecutive school years by the superintendent in a teaching position in those schools or classes requiring certification qualifications and whose salary is paid from the county school service fund, is reelected for the next succeeding year to such a position in those schools or classes . . . ."
But Education Code section 44911 provides in part: "Service by a person under a provisional credential shall not be included in computing the service required as a prerequisite to attainment of, or eligibility to, classification as a permanent employee of a school district."
Here LeVine was employed by the superintendent for over three years, but under an emergency credential. An emergency credential is a provisional credential. (See California Teachers Assn. v. Commission on Teacher Credentialing (1992) 7 Cal.App.4th 1469, 1472-1473.) Thus, pursuant to Education Code section 44911 none of LeVine's employment counts toward becoming a permanent employee. Section 44911 has exceptions, but LeVine does not argue his case is governed by one of the exceptions.
The trial court erred in not granting summary adjudication as to the contract cause of action. We need not consider LeVine's contention that the trial court abused its discretion in dismissing the contract cause of action for failure to prosecute.]]
The judgment is reversed on LeVine's statutory cause of action under the False Claims Act. In all other respects the judgment is affirmed. Costs on appeal are awarded to LeVine.
We concur:
YEGAN, J.
COFFEE, J.
John J. Hunter, Judge Superior Court County of Ventura ______________________________
Lowthorp, Richards, McMillan, Miller, Conway & Templeman and Glenn J. Campbell for Plaintiff and Appellant.
Parham & Rajcic, Jackson E. Parham and Pamela A. Dempsey for Defendants and Appellants.
* Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for partial publication. The portions of this opinion to be deleted from publication are identified as those portions between double brackets, e.g., [[/]].
1 VCSS has made a motion to dismiss this appeal insofar as it relates to the motion for reconsideration. VCSS also wants us to disregard all reference to the motion. The ground for VCSS' motion to dismiss is that the order denying the motion for reconsideration is not appealable. (Code Civ. Proc., § 904.1.) Although the order denying reconsideration is not appealable, it is reviewable on an appeal of the judgment. (Code Civ. Proc., § 906.) VCSS' motion is denied.
Here we hold that the False Claims Act applies to governmental entities. We therefore reverse the grant of summary adjudication for the cause of action based on the False Claims Act. In all other respects, we affirm.
FACTS Robert LeVine was employed as a teacher by the Ventura County Superintendent of Schools (hereinafter "VCSS") for approximately three and a half years. He held an emergency credential that expired annually. He was assigned to the McBride School at Ventura County Juvenile Hall. He worked in the "unit school" for maximum security inmates.
LeVine was the only teacher for between 40 to 80 students spread among 4 locked classrooms. In a memorandum dated August of 1994, LeVine complained to VCSS about understaffing. Levine raised these concerns at a McBride School staff meeting on December 14, 1994. The meeting was attended by the school principal, Dale Strayhorn.
Shortly thereafter LeVine received a memorandum from Strayhorn. The memorandum referred to the December 14 meeting. It stated in part: "During this meeting you participated in a discussion regarding coverage in Unit School. The discussion primarily involved you and me, and it lasted for approximately twelve minutes. [¶] During this discussion you made some statements that I felt were inappropriate. You stated you were not going to discuss the topic with me further, that I am incompetent to resolve the budget issue pertaining to hiring another personnel [sic] for Unit School, and that you were going directly to the Assistant Superintendent, Sandi Shackelford, the Superintendent, Dr. Charles Weis, and then to the State Department for a resolution; therefore, stipulating that you find it unnecessary to problem solve with me, Site Administrator, to coordinate procedures that will insure quality and safe educational program in Unit School." The memorandum stated that it would be placed in LeVine's personnel file.
On December 20, 1994, LeVine met with Strayhorn and Cary Dritz, Director of Human Resources for VCSS. The meeting was recorded. During the meeting Strayhorn told LeVine: "I have [sic] conversations with Correctional staff this morning and in the conversations, uh, they feel that you are, uh, irrational, you're showing an irrational behavior, and because of that we're going to ask you to go home on sick leave the rest of this week and for you to return we're going to ask that you request, uh, from your doctor a note saying that you are capable of coming back to work."
LeVine stated: "[A]s far as people making statements about me, I'd like to hear it to my face." Dritz replied: "It doesn't always work that way."
LeVine filed grievances on January 3, and 5, 1995, complaining about "retaliatory action taken for expressing his views at the 12/14/94, meeting." LeVine claimed in his grievance that at the December 14 staff meeting, "I stated over and over that I wanted a reason why these kids should be deprived of an instructor in the room when clearly they were bringing in the funding to easily pay for some desperately needed, long documented, staff help."
On January 9, 1995, LeVine attended a meeting with Dritz and Chris Meagher, the teachers' bargaining unit representative. The purpose of the meeting was to resolve LeVine's grievance and to work out terms under which he could return to work.
Meagher and Dritz believed an agreement was reached at the meeting. A letter sent by Dritz to LeVine recited that LeVine had agreed to abide by the following "expectations": "1. Able to remain calm in crisis. 2. Listen actively without becoming defensive or authoritarian. 3. Avoid win-lose conflicts. 4. Maintain a problem-solving orientation rather than resorting to withdrawal, blaming, hysteria or other emotional over-reactions. 5. Be courteous and considerate at all times. Convey professional demeanor. 6. Show respect for people in authority, even if you do not always agree with them. 7. Maintain a spirit of collegiality and promote a professional partnership with site administrator. 8. Report all problems and concerns to the site administrator. 9. Communicate regularly with the site administrator."
The letter also agreed that VCSS personnel would meet with LeVine within five days to, among other matters, "[r]esolve staffing issues at McBride School." The letter stated LeVine would be expected to return to work on February 6, 1995. If LeVine agreed he was to sign and return a copy of the letter by January 16, 1995.
LeVine denied that any such agreement had been reached. He wrote a letter to Dritz dated January 13, 1995, stating that Dritz's letter had been referred to LeVine's attorney for formal response. LeVine's letter stated in part: "[W]hile certain aspects of your communication were within a range that would permit further discussion, certain matters were omitted, and others in need of elaboration and clarification . . . ." The letter from LeVine's attorney stated, among other matters, that the staffing problem should be addressed prior to LeVine's return to work; that is, "what additional coverage is to be provided . . . within what time frame?"
LeVine testified in a deposition that Dritz was calling him at home "trying to badger me into coming back" to work. Then LeVine said, "I'm not saying he was trying to get me to come back to work at all. I don't know what was in Mr. Dritz's mind." LeVine said the essence of the telephone calls was that "[Dritz] was trying to force me to accept conditions that were demeaning, degrading and illegal . . . ."
Dritz wrote LeVine's attorney a letter dated January 23, 1995. The letter stated in part: "Mr. Levine will either return to work on or before January 23, 1995, [sic] and be in compliance with the directives of the January 9, 1995, memorandum or we will consider that he is absent without leave, failing to follow the direct orders of the Ventura County Superintendent of Schools Office abandoning his position with the Ventura County Superintendent of Schools Office."
LeVine testified that he received the letter after January 23, 1995. He said that when he received the letter he believed the "door had been shut" on his return to work. On February 7, 1995, LeVine received a letter from VCSS confirming that his employment had been terminated.
[[Nevertheless, the parties agreed to mediation before a state mediator. Mediation took place on June 30, 1995. On July 11, 1995, LeVine's attorney wrote to the mediator informing him that LeVine decided not to accept the mediator's proposed solution. On November 6, 1995, VCSS's attorney wrote to LeVine's attorney offering to facilitate a closed-door meeting with the board of education and a private meeting with the superintendent of schools. LeVine filed a government tort claim on January 30, 1996, and the instant action for breach of contract and wrongful termination on August 16, 1996.]]
VCSS made a motion for summary judgment or in the alternative, for summary adjudication. [[The motion was partially based on the theory that LeVine had no contractual right to continued public employment. It was also based on the theory that he had abandoned his job, had failed to make a timely claim under the Tort Claims Act and had failed to exhaust his administrative remedies.
Among the documents in support of its motion, VCSS submitted the declaration of Chris Meagher, President of the Federation of School Employees. Meagher declared that LeVine was a member of the bargaining unit represented by the federation. Meagher stated that according to the grievance procedure provided in the master agreement between the federation and VCSS, LeVine had until January 16, 1995, to request the federation to submit his grievance to binding arbitration. LeVine made no such request. Although Meagher's declaration states that a copy of the grievance procedures are attached, no such copy appears in the record on appeal. LeVine objected to Meagher's declaration as containing conclusions of law.
The trial court found triable issues of fact relating to the contentions that LeVine failed to exhaust administrative remedies and failed to file a timely claim. The court also found triable issues of fact relating to LeVine's cause of action for breach of contract.]] The trial court granted summary adjudication [[however,]] on the causes of action sounding in unlawful termination. [[The court found, among other matters, that LeVine had abandoned his job.
LeVine filed a motion for reconsideration of the summary adjudication. The motion for reconsideration included a copy of a grand jury report. The grand jury found that the unit school is understaffed; that the Education Code (§ 48645.3) requirement of 240 minutes of instruction per pupil per day was not being met; and that although the unit school generates the full $5,300 per pupil from the state, it actually receives less money than it generates. The trial court denied the motion for reconsideration. 1
LeVine's remaining cause of action for breach of contract was scheduled for trial on July 14, 1997. LeVine's attorney, Glenn J. Campbell, intended to try the case. On the morning of July 14, an associate in Campbell's firm received notice that the case was trailing on four-hour notice. The associate requested a continuance, pointing out that Campbell was in arbitration that had been ordered by the trial court in another matter. The court ordered trial to begin at 9 a.m. the following morning.
Campbell appeared at 9 a.m. and requested a continuance or a stay in the arbitration proceedings. The trial court denied both requests. When Campbell said he was not ready to proceed, the trial court dismissed the case for failure to prosecute. LeVine appeals and VCSS cross-appeals.]]
DISCUSSION Summary judgment or summary adjudication is properly granted only where there is no triable issue of fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subds. (c) & (f).) Where the defendant is the moving party, it bears the burden of showing that one or more elements of the cause of action cannot be established or that there is a complete defense. (Villa v. McFerren (1995) 35 Cal.App.4th 733, 743-745.) Unless the defendant meets its burden, plaintiff has no obligation to demonstrate that there is a triable issue of fact. (Ibid.)
I. LeVine contends the trial court erred in granting summary adjudication as to his cause of action based on Government Code section 12653.
Section 12653 of the Government Code is part of the False Claims Act. The False Claims Act concerns claims made against the state or any of its political subdivisions for money, property or services. (Gov. Code, § 12650, subd. (b)(1).) The False Claims Act provides for civil penalties against a person who, among other matters, "[k]nowingly presents or causes to be presented to an officer or employee of the state or of any political subdivision thereof, a false claim for payment or approval." (Gov. Code, § 12651, subd. (a)(1).)
Government Code section 12653, subdivision (b) provides: "No employer shall discharge, demote, suspend, threaten, harass, deny promotion to, or in any other manner discriminate against, an employee in the terms and conditions of employment because of lawful acts done by the employee on behalf of the employee or others in disclosing information to a government or law enforcement agency or in furthering a false claims action, including investigation for, initiation of, testimony for, or assistance in, an action filed or to be filed under Section 12652 [to enforce the False Claims Act]."
The False Claims Act must be construed broadly so as to give the widest possible coverage and effect to the prohibitions and remedies it provides in Government Code section 12653. (Southern Cal. Rapid Transit Dist. v. Superior Court (1994) 30 Cal.App.4th 713, 724.)
Here VCSS, which has the burden on its motion for summary adjudication, does not dispute that it applied for and received money to operate the unit school from the state. Nor does it dispute that the state in return for its money expected adequate staffing at the unit school. The state was not getting what it was paying for. It takes no leap of imagination to conclude that LeVine's expressions of concern about inadequate staffing were within the protection of section 12653, subdivision (b), of the Government Code.
VCSS claims it is not a person within the meaning of the False Claims Act. But Government Code section 12650, subdivision (b)(5), defines person as "any natural person, corporation, firm, association, organization . . . business, or trust." The terms "association" and "organization" are broad enough to encompass VCSS.
It is true that other statutes containing similar definitions of "person" have been held not to apply to governmental entities. (See Santa Monica Rent Control Bd. v. Bluvshtein (1991) 230 Cal.App.3d 308, 318 [Unfair Practices Act, Bus. & Prof. Code, § 17201]; Penn v. City of San Diego (1987) 188 Cal.App.3d 636, 642 [Cartwright Act, Bus. & Prof. Code § 16702].) But the statutes involved in those cases, the Unfair Practices Act and the Cartwright Act, largely concern the regulation of private business. The False Claims Act is different from those statutes in that its purpose is to protect the public fisc.
The definition of "person" must be read in light of the context and purpose of the statute. There is no reason to conclude the Legislature intended that the protection afforded to the public treasury by the Act be denied merely because the entity raiding the treasury is a governmental entity.
The court in Southern California Rapid Transit District v. Superior Court, supra, 30 Cal.App.4th at page 724, gave the False Claims Act a broad construction so as to give it the widest possible coverage. The court there was referring to acts that come within the scope of the statute. The broad interpretation should also apply to the person or entity committing the alleged fraud. We give the Act such an interpretation here. The most likely way that fraud perpetrated by a governmental entity will be exposed is through governmental employees who see the fraud being committed.
VCSS relies on Community Memorial Hospital v. County of Ventura (1996) 50 Cal.App.4th 199, 209-211. There we determined that a county was not subject to the Unfair Practices Act (Bus. & Prof. Code, § 17000 et seq.) and could not be sued in its operation of a public hospital furnishing free care to indigents. That determination was based on the rule that governmental agencies are excluded from the general provisions of a statute only if their inclusion would result in an infringement upon sovereign powers. (Community Memorial Hospital, supra, at p. 210.)
A county may have the sovereign power to fulfill its duty to guard the public health free from regulations that govern ordinary business. But no governmental agency has the power, sovereign or otherwise, knowingly to present a false claim. The very notion is repugnant to how government should operate by and for the people. VCSS is subject to the False Claims Act.
VCSS argues our interpretation of the False Claims Act creates an "incongruous dilemma" where the state could be found liable to itself. VCSS cites Eaglesmith v. Ward (9th Cir. 1995) 73 F.3d 857, 860, for the proposition that a county office of education is a state agency and a money judgment would be satisfied out of state funds.
Eaglesmith concerns whether a county office of education is a state agency entitled to Eleventh Amendment immunity from suit in federal court. The court relied on Belanger v. Madera Unified School Dist. (9th Cir. 1992) 963 F.2d 248, in concluding that it was. Belanger determined that a school district was immune in part because any judgment would be satisfied out of state funds. The court reasoned that the state determines the amount of money the district may spend per pupil and then provides the funds. (Id., at p. 252.)
Contrary to VCSS's argument, the cases do not show that the state could be liable to itself. They only show that the state contributes to the school district's budget based on the number of pupils in the district. There is not even a showing that the state might be indirectly liable. VCSS cites no authority that would require the state to increase the school district's funding to pay for an adverse judgment in this case.
The question remains whether the evidence shows as a matter of law that LeVine's employment was not terminated in retaliation for his threats to inform the state about inadequate staffing. That LeVine made such a threat is confirmed by Strayhorn's memorandum of December 19, 1994. A reasonable trier of fact could determine the memorandum was disciplinary in nature both from its tone and from the statement that it would be placed in LeVine's personnel file.
The next day Strayhorn told LeVine that correctional staff reported he was acting irrationally. Strayhorn sent LeVine home until he could obtain a note from his doctor. VCSS produced no evidence that LeVine was acting irrationally or that anyone reported so to Strayhorn. In light of the lack of such evidence and the timing of the suspension, so soon after LeVine threatened to inform the state, a reasonable trier of fact could conclude the suspension was retaliatory.
LeVine filed a grievance. Dritz sent a letter stating that an agreement had been reached. LeVine denied that any agreement had been reached. VCSS' letter did not promise any specific remedy for the intolerable and illegal conditions that led LeVine to protest in the first place. LeVine testified in his deposition that Dritz was trying to badger him into returning to work under conditions that were "demeaning, degrading and illegal."
Finally, on January 23, 1995, Dritz sent a letter to LeVine's attorney requiring LeVine to return to work on the same day. There is no indication the letter could have arrived in time for LeVine to comply. VCSS claims the date stated in the letter was an obvious mistake. But a trier of fact who views VCSS' motive as retaliatory might not be so convinced. The record discloses no effort on the part of VCSS to correct any mistake.
The trial court erred in granting summary adjudication as to his cause of action based on Government Code section 12653. [[We need not consider the applicability of Government Code section 53296, an issue raised for the first time on appeal.
II. We agree with the trial court that LeVine's non-statutory causes of action for wrongful termination are barred by governmental immunity.
The court in Southern Cal. Rapid Transit Dist. v. Superior Court, supra, 30 Cal.App.4th at page 726, recognized that the application of governmental immunity to Government Code section 12653 would emasculate the effect and purpose of the statute. Causes of action for wrongful termination not based on statutes, however, have not fared so well.
In Shoemaker v. Myers (1992) 2 Cal.App.4th 1407, 1425, the court concluded that a non-statutory claim for wrongful termination of a public employee fell squarely within the immunities provided by Government Code section 821.6. Section 821.6 provides: "A public employee is not liable for injury caused by his instituting or prosecuting any judicial or administrative proceeding within the scope of his employment, even if he acts maliciously and without probable cause." The court pointed out that our Supreme Court has held that public employees are immune from liability under section 821.6 for malicious prosecution in connection with public employment termination proceedings. (Hardy v. Vial (1957) 48 Cal.2d 577.)
LeVine argues that immunity provided by Government Code section 820.2 does not apply because the termination of his employment was a ministerial act. Government Code section 820.2 provides immunity for a public employee's discretionary acts. LeVine's argument is fatally flawed in at least two respects. First, it says nothing about the immunity granted under Government Code section 821.6. Second, LeVine cannot seriously mean that the termination of his employment was a ministerial act in which VCSS' superintendent and administrators exercised no discretion. The decision to terminate a person's public employment involves a basic policy decision for which section 820.2 provides immunity. (Eldridge v. Sierra View Local Hospital Dist. (1990) 224 Cal.App.3d 311, 326.)
III. VCSS contends that LeVine's action is barred for failure to comply with Government Code section 911.2. That section requires a person asserting a cause of action against a public entity to file a claim not later than six months after the accrual of the cause of action. VCSS points out that LeVine's employment was terminated on February 7, 1995, but LeVine did not file a claim until January 30, 1996.
LeVine relies on the doctrine of equitable tolling. He claims the time limitation of Government Code section 911.2 was tolled while he was pursuing the grievance procedure established by the collective bargaining agreement.
The doctrine of equitable tolling applies when a person has several legal remedies and reasonably pursues one designed to lessen the extent of the injury or damages. (Loehr v. Ventura County Community College Dist. (1983) 147 Cal.App.3d 1071, 1084.) There is a three-pronged test for the invocation of the doctrine. (Id., at p. 1085.)
First, the filing of the first claim must provide the defendant in the second claim with timely notice of the need to begin investigating the facts. Here LeVine filed a grievance alleging that his suspension was retaliatory. A meeting was held to resolve the terms under which LeVine could return to work. It is true that the grievance was filed before LeVine's employment was terminated. But the termination of LeVine's employment was a direct result of the parties' inability to reach an agreement on the conditions of LeVine's return. Because the termination of LeVine's employment was directly related to matters raised by the grievance, the grievance was sufficient to provide VCSS with timely notice.
Second, the two claims must be sufficiently similar that defendant's investigation of the first claim will place it in a position to fairly defend the second. Here Levine claims his employment was terminated for the same reason he was suspended. Thus, the claims are sufficiently similar.
Third, plaintiff must have acted reasonably and in good faith in filing the second claim. VCSS argues that LeVine's delay in filing his claim for more than six months after the grievance proceeding had terminated shows bad faith. VCSS places the termination of the grievance proceeding on January 9, 1995, when an agreement was reached. But LeVine denies any such agreement was ever reached.
As an alternative, VCSS suggests January 16, 1995, when LeVine failed to seek arbitration. But the parties participated in mediation conducted by the state mediation service. That is also part of the grievance procedure. Moreover, there is evidence from which a reasonable person could conclude that neither side considered matters to have reached an impasse until well after January of 1995. As late as November 6, 1995, VCSS' attorney offered to facilitate a closed-door meeting with the board of education and a private meeting with the superintendent of schools.
VCSS also argues LeVine showed bad faith when he took actions that could mislead VCSS into believing he had abandoned his second claim. The actions to which VCSS points are LeVine's acceptance of his salary through January of 1995, and his attorney's request for mediation before a state mediator. Both actions, however, are simply consistent with LeVine's position that his treatment by VCSS was unlawful. They do not indicate an intent to abandon any claim.
The trial court did not err in refusing to grant summary judgment or adjudication based on Government Code section 911.2.
IV. The next question is whether LeVine failed to exhaust his administrative remedies. VCSS points out that LeVine had the right to resolve his grievance through binding arbitration.
The doctrine of exhaustion of administrative remedies requires a party to use all available administrative agency procedures before resorting to the courts for relief. (McHugh v. County of Santa Cruz (1973) 33 Cal.App.3d 533, 538.) But here it appears that the arbitration to which VCSS refers is the result of a contractual provision, not an administrative regulation. Chris Meagher of the Federation of School Employees declared "the Federation was . . . responsible for . . . processing grievances alleging 'a violation of the specific provisions of' the master agreement. . . . Mr. LeVine's right to challenge the employment actions of VCSS were [sic] contained within the grievance procedure of the master agreement between the Federation and VCSS."
VCSS cites no authority for the proposition that LeVine must exhaust contractual remedies prior to bringing an action under the False Claims Act. VCSS' reliance on Tielsch v. City of Anaheim (1984) 160 Cal.App.3d 570 is misplaced. The case does not involve contractual remedies nor does it involve the False Claims Act. VCSS points to nothing in the False Claims Act that requires an exhaustion of contractual or administrative remedies.
V. VCSS contends it was entitled to summary adjudication on LeVine's cause of action for breach of contract.
In Shoemaker v. Myers (1990) 52 Cal.3d 1, a public employee who alleged his employment was wrongfully terminated attempted to state a cause of action for breach of contract or breach of the implied covenant of good faith. The court concluded that a public employee cannot state such a cause of action. The court said, "[I]t is well settled in California that public employment is not held by contract but by statute and that, insofar as the duration of such employment is concerned, no employee has a vested contractual right to continue in employment beyond the time or contrary to the terms and conditions fixed by law. [Citations.]" (Id., at pp. 23-24.)
In an attempt to show a statutory right to continued employment, LeVine claims he qualified as a permanent employee under Education Code section 1296, subdivision (b). That subdivision grants permanent employee status to a person who "after being employed for two complete consecutive school years by the superintendent in a teaching position in those schools or classes requiring certification qualifications and whose salary is paid from the county school service fund, is reelected for the next succeeding year to such a position in those schools or classes . . . ."
But Education Code section 44911 provides in part: "Service by a person under a provisional credential shall not be included in computing the service required as a prerequisite to attainment of, or eligibility to, classification as a permanent employee of a school district."
Here LeVine was employed by the superintendent for over three years, but under an emergency credential. An emergency credential is a provisional credential. (See California Teachers Assn. v. Commission on Teacher Credentialing (1992) 7 Cal.App.4th 1469, 1472-1473.) Thus, pursuant to Education Code section 44911 none of LeVine's employment counts toward becoming a permanent employee. Section 44911 has exceptions, but LeVine does not argue his case is governed by one of the exceptions.
The trial court erred in not granting summary adjudication as to the contract cause of action. We need not consider LeVine's contention that the trial court abused its discretion in dismissing the contract cause of action for failure to prosecute.]]
The judgment is reversed on LeVine's statutory cause of action under the False Claims Act. In all other respects the judgment is affirmed. Costs on appeal are awarded to LeVine.
GILBERT, Acting P.J.
We concur:
YEGAN, J.
COFFEE, J.
John J. Hunter, Judge Superior Court County of Ventura ______________________________
Lowthorp, Richards, McMillan, Miller, Conway & Templeman and Glenn J. Campbell for Plaintiff and Appellant.
Parham & Rajcic, Jackson E. Parham and Pamela A. Dempsey for Defendants and Appellants.
* Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for partial publication. The portions of this opinion to be deleted from publication are identified as those portions between double brackets, e.g., [[/]].
1 VCSS has made a motion to dismiss this appeal insofar as it relates to the motion for reconsideration. VCSS also wants us to disregard all reference to the motion. The ground for VCSS' motion to dismiss is that the order denying the motion for reconsideration is not appealable. (Code Civ. Proc., § 904.1.) Although the order denying reconsideration is not appealable, it is reviewable on an appeal of the judgment. (Code Civ. Proc., § 906.) VCSS' motion is denied.
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