Gallup v. Superior Court of Nev. Cnty.

235 Cal.App.4th 682

185 Cal.Rptr.3d 496

Emily GALLUP, Plaintiff and Respondent

v.The SUPERIOR COURT of Nevada County, Defendant and Appellant.

C073452

Court of Appeal, Third District, California.

Filed March 30, 2015

Renne Sloan Holtzman Sakai, Timothy G. Yeung and Steven P. Shaw, for Defendant and Appellant.

Law Office of M. Catherine Jones, M. Catherine Jones ; George F. Allen, for Plaintiff and Respondent.

Opinion

BLEASE, Acting P.J.Defendant Superior Court of Nevada County (SCNC) appeals a jury verdict in favor of plaintiff and former employee Emily Gallup. Gallup brought this action alleging, in part, that SCNC retaliated against her in violation of Labor Code section 1102.5, subdivision (b)¹ for engaging in protected activity when she complained to her supervisor, other court management, and the Administrative Office of the Courts (AOC)² that the Family Court Services Department (FCS) was not providing services in compliance with the law, rules, regulations, and policies. SCNC demurred to this cause of action on the ground Gallup had failed to exhaust her administrative remedies under section 98.7.

The trial court overruled the demurrer, relying on Lloyd v. County of Los Angeles (2009) 172 Cal.App.4th 320, 90 Cal.Rptr.3d 872. The case was tried before the jury on the section 1102.5, subdivision (b) cause of action alone, as all Gallup's other causes of action were disposed of by demurrer or summary judgment. The jury found in Gallup's favor, awarding her past economic loss in the amount of $168,206, future economic loss in the amount of $105,000, and past noneconomic loss in the amount of $40,000, for a total of $313,206.

SCNC appeals from the judgment, raising as the only issue the trial court order overruling the demurrer. We shall conclude that Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 25 Cal.Rptr.3d 320, 106 P.3d 976 (Campbell ), is the controlling authority, and shall reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

This is an appeal from a final judgment in a case that was tried before a jury after the trial court overruled defendant SCNC's demurrer. The only issue tendered is whether the trial court erred in overruling the demurrer. For purposes of review, we accept as true all facts properly pleaded in the complaint in order to determine whether the demurrer was properly overruled. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971, 114 Cal.Rptr.2d 748.) The standard of review is de novo. (Ibid. )

Gallup was employed by SCNC as a mediator in the FCS. Beginning in late 2009, Gallup raised concerns both verbally and in writing to her superiors about FCS's possible failure to follow applicable legal and ethical mandates. Gallup's concerns included insufficient time for mediation appointments, inadequate review of records and gathering of facts, failure to consider criminal histories, failure to advocate for the best interests of the children, failure to offer separate mediation to domestic violence victims, and use of undue influence to pressure parents into mediated agreements.

After Gallup made the above complaints, she was subjected to criticism and accusations of behaving unethically and unprofessionally, of being ineffective, and of taking too long on cases. Her work was subject to excessive scrutiny, and she was inappropriately interrupted while engaged in mediation sessions.

In April 2010 Gallup filed a grievance against SCNC pursuant to SCNC's Personnel Policies and Procedures Manual (Personnel Manual), alleging she was the victim of retaliation and harassment because she had voiced her concerns about violations of the California Rules of Court and the Family Code. Gallup went out on medical leave on July 2, 2010. She returned to work the day after completion of the grievance arbitration hearing, which was concluded on September 28, 2010.

On December 7, 2010, Gallup received a formal written reprimand. On December 8, 2010, she discovered a document left on the office printer when she retrieved her own work from the printer. It consisted of journal entries written by her supervisor, and was part of an effort to discredit her work performance. The next day Gallup gave the document to her attorney, then returned it to her supervisor. A day later she was called into a disciplinary meeting and accused of violating the confidentiality of the parties because she had shared the journal entries with her attorney. On December 14, 2010, Gallup received a “Notice of Intent to Dismiss from Employment.” The stated reason for the termination was Gallup's disclosure of confidential information.

Gallup filed this action in April 2011. Her complaint contained several causes of action, including retaliation for whistleblowing pursuant to section 1102.5, subdivision (b).³ She alleged that she engaged in activity protected by section 1102.5, subdivision (b) when she complained to her supervisor, other court management, and the AOC, and informed them that FCS was not providing services in compliance with the law. She alleged her complaints were a contributing factor in SCNC's decision to retaliate against her by terminating her employment.

SCNC demurred to the complaint. The trial court sustained the demurrer in part and overruled it in part. At issue in this appeal is the trial court's overruling of the demurrer to Gallup's cause of action under section 1102.5. SCNC had argued such claims were barred because Gallup had failed to exhaust her administrative remedies. Relying on Lloyd v. County of Los Angeles, supra, 172 Cal.App.4th 320, 90 Cal.Rptr.3d 872, the trial court concluded exhaustion of the administrative procedure was not a prerequisite to a civil action.

The case proceeded to jury trial solely on Gallup's cause of action under section 1102.5, subdivision (b). The jury found in Gallup's favor and awarded her $313,206 in damages.

In this appeal SCNC claims the trial court erred when it overruled the demurrer, finding exhaustion of administrative remedies was not a prerequisite to a judicial action under section 1102.5. We shall conclude Gallup was required to exhaust the administrative remedy provided by section 98.7.

DISCUSSION

The doctrine of exhaustion of administrative remedies holds that where an administrative remedy is provided by statute, relief must be sought and exhausted from the administrative body before the courts will act. (Campbell , supra, 35 Cal.4th at p. 321, 25 Cal.Rptr.3d 320, 106 P.3d 976.) Accordingly, in Campbell the Supreme Court held that where an employee's complaint alleged her employer had violated section 1102.5, the exhaustion doctrine applied and the trial court properly sustained the employer's demurrer for failure to exhaust the employer's internal administrative remedies. (Campbell , at p. 333, 25 Cal.Rptr.3d 320, 106 P.3d 976.)

Section 1102.5 is silent regarding administrative remedies, but another section of the Labor Code, section 98.7, subdivision (a), provides in part: “Any person who believes that he or she has been discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner may file a complaint with the division within six months after the occurrence of the violation.” SCNC contends Gallup was required to file a complaint with the labor commissioner pursuant to section 98.7 in order to exhaust her administrative remedies before seeking a judicial remedy for violation of section 1102.5.

Notwithstanding the holding of Campbell a division of the Second Appellate District held that section 98.7 merely provided the employee with an additional remedy, and that the employee was not required to exhaust section 98.7's administrative remedy before bringing a judicial action pursuant to section 1102.5. (Lloyd , supra, 172 Cal.App.4th 320, 331–332, 90 Cal.Rptr.3d 872.) As stated, the trial court relied on Lloyd in overruling the demurrer.

In 2013 the Legislature passed Senate Bill No. 666 (2013–2014 Reg. Sess.) (Senate Bill 666).⁴ Senate Bill 666 added section 244, which states in pertinent part: “An individual is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of this code, unless that section under which the action is brought expressly requires exhaustion of an administrative remedy. This subdivision shall not be construed to affect the requirements of Section 2699.3.”⁵ (§ 244, subd. (a).) Section 244 took effect January 1, 2014, after the trial was concluded and the case was pending appeal. (Gov. Code, § 9600.)

At the same time it passed section 244, the Legislature amended section 98.7 to add the following language: “In the enforcement of this section, there is no requirement that an individual exhaust administrative remedies or procedures.” (Stats. 2013, ch. 732, § 3.)

As these amendments were enacted after judgment was rendered in this case, we must first decide whether the amendments affect the resolution of this case.

I

Amendments are Not Retroactive or Declaratory of Existing Law

“Generally, statutes operate prospectively only.” (Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 840, 123 Cal.Rptr.2d 40, 50 P.3d 751.) Statutes operate prospectively unless they contain an express retroactivity provision, or it is “ ‘very clear’ ” the Legislature intended the statute to operate retroactively. (Id. at p. 841, 123 Cal.Rptr.2d 40, 50 P.3d 751.) The statutes at issue do not contain an express retroactivity provision, and there is nothing in the legislative history of the legislation that would make it very clear the Legislature intended retroactivity.

Gallup points to the summary following a June 18, 2013, meeting of the Assembly Committee on Judiciary regarding Senate Bill 666, which stated: “this bill [¶] ... [¶] ... [c]larifies that an employee or job applicant is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of the Labor Code,...