Full price offer does not invoke offering real estate broker's contractual right to commission

Real Estate.jpgThere are times when real estate brokers will claim entitlement to a commission, even though the sale of the real property in question has not been completed. One such case is presented in RealPro, Inc. v. Smith Residual Company LLC (filed February 28, 201) 2012 DJDAR 2655.

Defendant listed its vacant land for sale with its listing broker on the following terms: $17 million cash or such other price and terms acceptable to defendant and additional standard terms; a cooperative broker may enforce the listing agreement as a third party beneficiary (4% total commission). Within the listing period, plaintiff broker submitted to the listing broker a written offer to purchase the property for the full price of $17 million, all cash. About one month later, defendant responded with a counteroffer of an increased listing price of $19.5 million. The counteroffer was not accepted. Plaintiff eventually demanded its 2 percent brokerage fee and sued defendant for refusing to pay.

In Riverside Superior Court proceedings, defendant demurred on numerous grounds including condition precedent: that the listing price was alternatively such other price and terms acceptable to owner and escrow must close prior to payment of any commission. The trial court sustained the demurrer without leave to amend. The Court of Appeal, 4th Appellate District, Division Two, affirmed, concluding that the allegations of plaintiff's action established as a matter of law that there was no enforceable written contract entitling plaintiff to a commission.

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Neurologist's DMV seizure evaluation of patient privileged in barring patient-caused accident claim of injured party

DMV.jpgPlaintiff Cang Wang suffered critical injuries when struck by the vehicle driven by Amr Sarieh, who had lost consciousness at the wheel as a result of an epileptic seizure. Sarieh recently had his driving privileges restored based on an evaluation filed with the DMV by his treating neurologist defendant Christianne Heck, M.D., clearing him to drive. In Wang v. Heck (filed January 24, 2012, certified for publication February 12, 2012) 2012 DJDAR 2131, the Court of Appeal, Second Appellate District, Division Four, affirmed the trial court's grant of summary judgment dismissing the lawsuit against Dr. Heck.

The litigation privilege is found in California Civil Code section 47, subdivision (b), and affords litigants and witnesses in judicial and quasi-judicial proceedings freedom of access to these processes without fear of being harassed by later lawsuits against them for testimony they give or steps they take in connection with those proceedings. (See Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241.) The appellate court in Wang agreed with the trial court that defendant's form evaluation presented to the DMV fell within this privilege and barred plaintiffs action.

The Court of Appeal rejected plaintiff's argument that defendant's negligent conduct was her failure to warn Sarieh not to drive, which was independent of her completion of the DMV evaluation form; failure to warn her patient was not a communication within the litigation privilege according to plaintiff.

The court cited Gootee v. Lightner (1990) 224 Cal.App3d 587, where the defendant psychologist had performed testing on plaintiff's family in order to testify in child custody proceedings; claims against this court expert acting in a testimonial capacity are barred. Similar reliance is placed on Block v. Sacramento Clinical Labs, Inc. (1982) 131 Cal.App.3d 386 concerning the claim that a toxicologist was negligent in reaching findings as to cause of death. Because the gravamen of plaintiff's claim in the instant case was Dr. Heck's completion of the DMV evaluation form, the litigation privilege likewise extended to her conduct.

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Foundational proof in red-light-camera cases must be based on personal knowledge

traffic Lights.jpgMunicipal governments in California face many challenges. Two of these are to improve traffic safety and to raise revenues. The advent of red-light-camera enforcement proposed to assist these divergent objectives. But a simple problem of meeting evidentiary requirements may be derailing this campaign.

In People v. Borzakian (filed January 23, 2012, certified for publication February 10, 2012) 2012 DJDAR 1923, defendant contested the mailed citation she received for failing to stop at a red light based on automated photographic evidence. At trial, she objected to the People's evidence that consisted of a police officer testifying en masse in traffic court that the photographic equipment provided by a private company was properly calibrated and maintained, causing the photographic depiction to be accurate. She objected for lack of foundation, hearsay, and violation of the right of confrontation stated in Melendez-Diaz v. Massachusetts (2009) 129 S.Ct. 2527. The trial court overruled the objection and convicted her. Defendant appealed via transfer to the Court of Appeal, Second Appellate District, Division Seven. That court reversed the judgment.

The appellate court noted a split of previous opinions on the subject. In People v. Khaled (2010) 186 Cal.App. 4th Supp. 1, the Orange County Superior Court Appellate Division found that unless a testifying officer had personal knowledge of the foundation for introducing into evidence photographs, the underlying workings of the automated camera and the business records in connection therewith, the photograph was inadmissible. The Los Angeles Superior Court Appellate Division disagreed in People v. Goldsmith (2011) 193 Cal.App.4th Supp.1. Goldsmith found the photographs were not statements from a human declarant, and they were entitled to a presumption of accuracy that had to be rebutted by a challenging defendant.

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Hotel bathtub slip-and-fall: previous accidents must be sufficiently similar to give innkeeper notice of dangerous product/condition

February 27, 2012

Hotel.jpgIn Howard v. Omni Hotels Management Corp. (filed January 11, 2012, certified for publication February 8, 2012) 2012 DJDAR 1786, plaintiff injured himself as a result of a slip and fall in the bathtub while staying at one of defendant Omni's rooms in San Diego. He sued Omni for premises liability and negligence; he also sued the bathtub manufacturer, Kohler, for negligence and strict liability. Both defendants succeeded on summary judgment; however, the trial court set aside the judgment in favor of Omni when it granted a motion for new trial on the grounds that there were triable issues of fact regarding the existence of constructive notice of an unreasonably dangerous condition concerning two previous bathtub accidents in another Omni hotel.

The Court of Appeal, Fourth Appellate District, Division One, affirmed as to Kohler and reversed as to Omni with directions to enter a defense summary judgment. Concerning the claims against Kohler, the court found that plaintiff failed to present a sufficient factual basis supporting the application of a higher safety standard for the bathtub than the industry safety standards as proven to have been exceeded by defendants. As to Omni, plaintiff failed to show that the asserted prior incidents were substantially similar.

The ruling in favor of Kohler illustrates that a plaintiff does not necessarily get past a summary judgment by presenting the declaration of a "dueling" expert. Here plaintiff presented its expert's opinion that a greater standard than the industry standard would be better. However, the appellate court agreed with the trial court that merely contraverting what was a better standard did not create a triable issue. Kohler's exceeding the industry standard creates a presumption of non-defect/due care unless plaintiff could show Kohler had knowledge of greater than the expected dangers that should have been addressed by a higher standard of design.

Another common misconception is that a prior accident of the same general nature puts a defendant on notice of the danger that caused a present accident. Here, Omni had experienced two prior bathtub accidents in one of its hotels across the country, in New Haven, Connecticut. But the evidence presented by plaintiff did not give any detail about the condition of the other bathtubs or the medical condition of the hotel guests who fell. Plaintiff had the burden to show sufficient similarity and the court here failed to find sufficient evidence that the plaintiff had done so. (See Buehler v. Alpha Beta Co. (1990) 224 Cal.App.3d 729, 734.)

Factual issue of hirer's negligent exercise of retained control in form of affirmative contribution renders reversal of grant of summary judgment

February 23, 2012

gavel.jpgIn Tverberg v. Fillner Construction Inc. (filed January 26, 2012) 2012 DJDAR, general contractor Fillner (defendant) was expanding the fuel pump area of a gas station. Two items of work involved the construction of a canopy and the erection of concrete posts to prevent vehicles from colliding with the fuel dispensers. Plaintiff Tverberg was the independent contractor who was the foreperson of Perry, the subcontractor constructing the canopy. Another sub, Alexander, was erecting the concrete posts. Plaintiff asked defendant's lead person twice, once before the start of the canopy construction and once on the next day after that construction started, to cover the wholes that had been dug where the posts (unrelated to canopy construction) were going to be installed. On the first occasion, the response was no equipment was available that day to over the holes. On the second occasion, a tractor was used by defendant to flatten the dirt piled around the holes. Later on that second day, Tverberg injured himself when he fell into one of the holes while walking toward the canopy work area.

In Solano Superior Court, defendant was granted summary judgment on each of two claims of liability: (1) breach of nondelegable regulatory duty and (2) negligent exercise of retained control. The Court of Appeal, First Appellate District, Division Four, reversed.

The appellate court first notes that the California Supreme Court in SeaBright Ins. V. US Airways, Inc. (2011) 52 Cal.4th 590 determined that the first theory is not actionable because the duty is delegable. However, the second theory here, if factually in dispute, is actionable. The court finds that triable issues of fact remain on that theory and reversed the judgment accordingly.

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Insufficient evidence of employer's retaliatory intent arising from employee's allegation charging sexual harassment against supervisor

Police_Line.jpg"This case has a somewhat tortuous procedural history." With this introductory comment, the California Court of Appeal, Second Appellate District, Division Four, clues the reader in on what lies ahead in its opinion of Joaquin v. City of Los Angeles (filed January 23, 2012) 2012 DJDAR 939. And the facts are as tortuous as the procedural history. After briefly reviewing the facts and proceedings, I will share some thoughts on the reasoning that gets the court to its reversal (without remand) of the jury's $2.1 million verdict awarded Joaquin.

Richard Joaquin is a LAPD police officer who at times worked under Sergeant James Sands. A dispute arose between Joaquin and Sands, acting as Joaquin's watch commander, as to whether Joaquin had completed his work shift. Sands eventually directed disciplinary measures. Joaquin perceived Sands' actions as retaliation against Joaquin's rebuff of what Joaquin claimed were Sands sexual advances. Internal Affairs (IA) investigations found Joaquin's allegations unfounded.

Sands then lodged with IA his own complaint against Joaquin (for making false statements), resulting in proceedings before the Board of Rights, which put Joaquin's promotion to sergeant on hold.and temporarily relieved him of his duties. The Board found Joaquin guilty of misconduct concluding he retaliated against Sands by initiating a false complaint, resulting in 2006 in Joaquin's termination. As a result of writ proceedings, Joaquin succeeded in gaining reinstatement in 2009.

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HOSPITAL HAS NO DUTY TO DIRECTLY REPORT RESULTS TO PATIENT WHEN PERFORMING TESTING ORDERED BY DOCTOR

Hospital.jpgIn Walker v. Sonora Regional Medical Center (filed January 12, 2012) 2012 DJDAR 553, Amber Walker engaged the services of her personal physician, Dr. Teel, for pregnancy care. Among the prenatal laboratory tests that Dr. Teel ordered was a cystic fibrosis screening test to detect her genetic predisposition of having a child with cystic fibrosis. She went to Sonora Regional Medical Center (Hospital) where she had a blood specimen taken which was sent to a Salt Lake City laboratory that did the genetic testing; that laboratory then sent the results back to Hospital and Hospital promptly transmitted the results to Dr. Teel, who personally reviewed the results, which stated that Amber was a carrier of cystic fibrosis. Dr, Teel made a notation on the lab report to review with the patient, but he never did. Amber suffered a miscarriage.

Several months later, Amber was again pregnant and returned to Dr. Teel's office for eleven prenatal visits over the next 7 months. No mention was ever made of her previous cystic fibrosis test results. Amber declined to undergo another cystic fibrosis test, apparently believing that silence from the doctor's office on the subject meant her results were negative. Amber gave birth to a daughter, Payton, who was later diagnosed with cystic fibrosis.

The Walkers sued various defendants, including Hospital, on theories of negligence. Hospital moved in the trial court for summary judgment, primarily on the ground it had no duty to directly notify Amber of the lab results; its sole duty was to notify Dr. Teel, who was then to contact the patient. The trial court agreed, granting the motion. The Court of Appeal, Fifth Appellate District, affirmed.

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Product liability limited to injury caused by defendant's own product or loss directly caused by that product's use

product_087.jpgThe California Supreme Court is widely credited as the originator of strict product liability as a means of tort recovery for its pronouncement in Greenman v Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 62: "A manufacturer is strictly liable in tort when an article he places into the market, knowing that it is to be used without inspection for defects, proves to have a defect that caused injury to a human being." Soon thereafter the theory was expanded such that strict liability encompassed even those injuries traceable to a defective component part that was supplied by someone other than the defendant manufacturer of the finished product. (Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256, 262.)

In O'Neil v. Crane Co.(filed January 12, 2012) 2012 DJDAR 464, the current state high court was asked to extend liability for the harm caused by replacement parts, made by someone other than the defendant manufacturer, that were used in conjunction with (rather than as component parts of) defendant's product. In a unanimous decision, the Supreme Court decided to limit a manufacturer's duty to foresee such harm unless the defendant's own product contributed substantial harm or the defendant participated substantially in creating a harmful combined use of the products.

Defendants Crane and Warren (Warren Pumps, LLC) made valves and pumps respectively that were used in US Navy warships according to government specifications. Gaskets and packaging materials were used as sealants for defendant's products; based on Navy specifications, these sealant materials were made of asbestos and replaced during routine maintenance. Patrick O'Neil served on a ship that contained these products from 1965 to 1967. While supervising enlisted men repairing ship equipment, he was exposed to airborne asbestos fibers that were released during the repair of valves and pumps manufactured by defendants. However, none of the asbestos dust came from defendant's products. In 2004, O'Neil developed mesothelioma, causing his death about one year later. Family of O'Neil filed this wrongful death action raising strict liability and negligence claims.

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Employment discrimination lawsuit brought by "called" teacher barred by ministerial exception under 1st Amendment freedom of religion

teacher.jpgThe Untied States Supreme Court has weighed in for the first time on the question of whether church ministers are exempt from the protection of employment discrimination statutes. In Hosanna-Tabor Evangelical Lutheran Church and School v. E.E.O.C. (filed Jan.10 2012) 2012 DJDAR 374, it concludes the First Amendment's Establishment and Free Exercise Clauses strike a balance between one's employment rights and "the interest of religious groups in choosing who will preach their beliefs, teach their faith, and carry out their mission;" acting as a bar to lawsuits under such statutes. The fact the High Court unanimously so ruled is not surprising. What appear to concern some commentators (see Daily Journal guest column of January 19, 2012 by Dean Erwin Chemerinsky) is that the specific facts of Hosanna-Tabor involved a person who was primarily an elementary school teacher at the private religious school operated by the church.

Cheryl Perich started as a lay teacher at the school in 1999. By the end of that first school year, she completed religious training that qualified her for a diploma and caused the school/church to call her as a commissioned minister of the church. She continued to teach secular subjects, and in addition taught a religious class 4 days a week and led chapel services twice a year.

In 2004, Perich took medical leave due to narcolepsy, at which time she was replaced by a lay teacher. Later in the school year, upon her notifying the school principal her condition had improved allowing her to return to work, the school administrators advised the church congregation she was unlikely to be physically able to perform her duties for 2 years; the congregation voted her a "peaceful release" from her call, that she would be deemed to have resigned in exchange for the church maintaining a portion of her health care premium. When Perich refused to accept these terms, she was terminated for insubordination. Perich complained to EEOC, which filed a law suit on her behalf.

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Does the idiopathic cause of injury fail to "arise out of" employment thus not constitute compensable injury under Workers' Compensation Law?

The California Supreme Court currently has before it a petition for review in the case of Harris Ranch Inn & Restaurant v. WCAB (Orrala) (#S199077, filed December 30, 2011). This petition follows the denial of Petition for Writ of Review in the Court of Appeal, Fifth Appellate District on December 21, 2011.

This case involves an employee who was injured after suffering an idiopathic seizure (arising spontaneously or from an obscure or unknown cause) and falling to the cement floor on which he was standing. The employee has a documented history of seizures, unknown to the employer, that based on undisputed medical evidence was unrelated to and pre-existed his employment. There is no evidence the nature of the employee's work or the manner in which he was doing it was a contributing cause of the seizure and resulting head injury.

The worker's compensation ALJ and WCAB found the employee sustained injury "arising out of and in the course of employment," based on the nearly 60-year old case of Employers Mutual Liability Insurance Company v. Industrial Accident Commission (1953) 41 Cal.2d 676 (Gideon), in which the California Supreme Court upheld an award of benefits to an employee who sustained injuries to his head when he fell as a result of an idiopathic seizure while at work.

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New Penalties For Misclassification Of Individuals As Independent Contractors

January 16, 2012

IC.jpgJanuary 1st is often the date that employment laws enacted during the prior calendar year go into effect. While many new laws are widely publicized, others seem to slip by unnoticed until an employer is informed that it has violated some rule that it never knew existed. Two recent additions to the California Labor Code are of particular importance to businesses that use independent contractors and individuals who advise those business as to the appropriateness of independent contractor classifications.

Starting on January 1, 2012, newly added California Labor Code section 226.8 imposes penalties ranging from $5,000 to $15,000 against a person or employer who is found to have "willfully" misclassified an individual as an independent contractor. In situations where a person or employer is found to have engaged in a "pattern or practice" of misclassifying individuals as independent contractors, the penalty to be imposed ranges from $10,000 to $25,000. The penalty is assessed per individual misclassified and is in addition to all other penalties/fines permitted by law. Businesses have always known that evaluating independent contractor relationships can be tricky and the risks for misclassification are great due to potential problems under applicable tax and employment laws. However, these new penalties could potentially cripple a business that makes a mistake with respect to the classification of multiple individuals who all provide the same type of service to the business. In addition to the imposition of penalties, Section 226.8 authorizes the California Contractors State License Board to initiate disciplinary action against a licensee who is found to have "willfully" misclassified an individual as an independent contractor.

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Make Sure You Know Your Obligations Under The California Transparency In Supply Chains Act

January 13, 2012

January 1st is often the date that laws enacted during the prior calendar year go into effect. While many new laws are widely publicized, others seem to slip by unnoticed until a business is informed that it has violated some rule that it never knew existed. One law, that is surprising a number of companies is the California Transparency in Supply Chains Act of 2010 (the "Act'). Signed by then Governor Arnold Schwarzenegger, the Act requires companies doing business in California to, by January 1, 2012, post information on their websites informing consumers what steps the company takes to ensure that its supply chains are free from slavery and human trafficking. Interestingly, unlike other laws, whether a company is subject to the Act is not determined by the number of individuals employed by the company or the fact that the company has contacts with areas of the world in which slavery and human trafficking are prevalent. Instead, the Act applies to all companies operating in California that have over 100 million dollars in annual worldwide gross receipts.

If a company satisfies the basic criteria to be covered under the Act, the company must post information on its website indicating what, if any, actions the company takes with respect to the following:
evaluating and addressing the risks of human trafficking and slavery in the company's product supply chains;

  • requiring the company's direct suppliers to certify that the materials incorporated into company products comply with laws regarding slavery and human trafficking;
  • conducting audits of the company's suppliers to evaluate compliance with company standards on human trafficking and slavery;
  • maintaining accountability standards and procedures for employees or contractors that fail to meet the company's standards regarding slavery and human trafficking; and
  • providing employees and managers, who have direct responsibility with supply chain management, with training on the mitigation of human trafficking and slavery risks.

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New Disclosure Requirements Mandated By The California Labor Code

January 12, 2012

Labor Code.JPGJanuary 1st is often the date that employment laws enacted during the prior calendar year go into effect. While many new laws are widely publicized, others seem to slip by unnoticed until an employer is informed that it has violated some rule it never knew existed. Even worse, an employer's obligations under certain laws are not fully identified until shortly before compliance is required. One such law that is causing a lot of confusion for California employers is the California Wage Theft Protection Act 2011 (the "Act"). Signed into law on October 9, 2011, the Act makes various changes to the California Labor Code including adding Section 2810.5. Section 2810.5 requires that starting on January 1, 2012, employers must provide all non-exempt California employees with a notice, given at the time of hire, which provides the following information:

  • the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable;
  • allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;
  • the regular payday designated by the employer in accordance with the requirements of the California Labor Code;
  • the name of the employer, including any "doing business as" names used by the employer;
  • the physical address of the employer's main office or principal place of business, and a mailing address, if different;
  • the telephone number of the employer;
  • the name, address, and telephone number of the employer's workers' compensation insurance carrier; and
  • any other information the Labor Commissioner deems material and necessary.

While the specific disclosures identified in Section 2810.5 seem fairly clear, the "any other information the Labor Commissioner deems material and necessary" requirement has created a number of problems. As mandated by the Act, the Labor Commissioner has provided employers with a form Section 2810.5 notice that can be downloaded from the Labor Commissioner's website. However, the Labor Commissioner did not make the form notice available until the last week of December, 2011. Moreover, when the form notice was circulated, it became clear that the Labor Commissioner had added a number of disclosures not specifically identified in Section 2810.5. For instance, employers must also inform each new hire whether the employment relationship is governed by an oral or written contract and identify any other businesses or entities the employer uses to hire employees or administer wages/benefits. Since the Labor Commissioner did not issue the form notice until a few days before the new law went into effect, even those employers who knew about the requirements of Section 2810.5 were forced to scramble over the holiday weekend to revise their forms to make sure they covered all the information that had to be disclosed. Unfortunately, there are still many employers that do not know about the new information required by the Labor Commissioner or have no idea that non-exempt new hires must now be given the information discussed above. Given the risks associated with an employer's failure to comply with the requirements of Section 2810.5, it is recommended that all employers discuss the new disclosure requirements with legal counsel and determine how best to proceed.

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Plaintiff's wrongful death verdict reversed on finding of no legal duty of care for gas eruption due to vehicle collision with defendant's off-street gas meter assembly

gavel.jpgTiffany Gonzalez was driving home from work at the posted speed of 25 MPH one late afternoon when another vehicle apparently attempted to pass her on the right of the single lane of traffic in her direction of travel. The intrusion caused her to veer into the opposite side of the undivided road and lose control. Her vehicle drove over the opposite curb maintaining the same speed and colliding with a block wall and careening into defendant Southern California Gas Company's gas meter assembly located on private property outside the wall, the assembly being located 11 feet 4 inches from the curb. The force of the collision caused the vehicle to knock one of three concrete-filled steel protective posts onto the assembly, breaking the gas line and causing a fire that enveloped Tiffany's vehicle. Two days later, Tiffany died of her injuries.

The parents of Tiffany sued the gas company and others for wrongful death in Gonzalez v. Southern California Gas Company (filed December 13, 2011) 2011 DJDAR 17858. This appellate opinion arises from the California Supreme Court granting review of the earlier Court of Appeal opinion that had reversed plaintiff's judgment against the gas company after jury verdict in the sum of $800,000. ($2 million in damages, fault-apportioned 40% to gas company, 50% to Tiffany and 10% to property owner.) The state
high court transferred the case back to the Court of Appeal, Fourth Appellate District, Division One, with instructions to reconsider in light of Cabral v. Ralph's Grocery Co. (2011) 51 Cal.4th 764. The Court of Appeal issued this revised opinion, again reversing the trial court judgment.

The appellate court concluded that the gas company owed no legal duty to Tiffany, thus reversing the judgment as a matter of law; this resulted in entry of judgment in favor of the gas company. The jury had found that this defendant's negligence was a substantial factor in causing the plaintiffs' damages; defendant's motion for JNOV had been denied by the trial court.

The opinion of the Court of Appeal focuses on the "forseeability" factor found under the venerable duty standards cited in Rowland v. Christian (1968) 69 Cal.2d 108. To start, as Rowland sets forth, there is no exception to the general rule of Civil Code section 1714 that a party owes a duty to exercise due care in its actions so as not to create an unreasonable risk of injury "unless clearly supported by public policy." (Id. at p. 112-113.) "Forseeability of harm" is a major public policy factor. (Ibid.) And as the Gonzalez court points out, it is crucial to distinguish between a determination that the defendant owes no duty of ordinary care, which is for the court to make, and a determination that defendant did not breach that duty, which is for the jury to decide.

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Teacher/director terminated at church's preschool for violating church's marital precepts is not protected by FEHA, Title VII or public policy

director terminated .jpgIn Henry v. Red Hill Evangelical Church of Tustin (filed December 9, 2011) 2011 DJDAR 17734, plaintiff was terminated from her employment with defendant because she and her boyfriend continued to live together and raise their child without being married. Her lawsuit asserted violations of the California Fair Employment and Housing Act [Govt. Code section 12900, et seq. (FEHA)] and Title VII of the federal 1964 Civil Rights Act, and termination in violation of public policy.

The trial court heard the bifurcated initial portion of the case pertaining to defendant's defenses and found the "ministerial exception" applied precluding plaintiff from prevailing. The California Court of Appeal, Fourth Appellate District, Division Three, affirmed, determining defendant church is exempt under each of FEHA and Title VII, and that the ministerial exception additionally precludes plaintiff's public policy cause of action.

Plaintiff Sara Henry was an at-will employee of defendant church's pre-school (a part of the church's ministry) for nearly 7 years, acting as a teacher and most recently performing the additional duties of "director." She agreed in writing that her duties were "God-ordained" and pledged her "prayer, support, and assistance" to families participating in this "ministry" of the church. In addition to serving as a Christian role model, her responsibilities included teaching religion and secular subjects to pre-schoolers, conducting devotional times weekly and chapel services three to four times during the year, giving weekly tours to parents of prospective students emphasizing that Bible based Christian values were taught, and handling administrative chores.

Defendant terminated plaintiff's employment several months after it learned of her living with her boyfriend and child without benefit of marriage. She was counseled prior to termination and acknowledged her living arrangement was contrary to the teachings of the Bible; that she intended to marry her boyfriend but did not know when.

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