Stacy McCrory vs County of Santa Barbara
Case No: 18CV01334
Hearing Date: Fri Jun 01, 2018 9:30

Nature of Proceedings: Demurrer

TENTATIVE RULING:

For the reasons set forth herein, the demurrer of defendant County of Santa Barbara to the third cause of action of the complaint is overruled. Defendant shall file and serve its answer to the complaint on or before June 18, 2018.

Background:

As alleged in the complaint: Plaintiff Stacy McCrory was employed by defendant County of Santa Barbara (County) as a Forensic Liaison in the Department of Alcohol, Drug, and Mental Health Services (ADMHS). (Complaint, ¶ 6.) On July 15, 2014, McCrory voluntarily resigned her employment with ADMHS. (Complaint, ¶ 7.)

On August 17, 2015, McCrory was again hired by County, this time in the role of Forensic Manager in the Department of Behavior Wellness. (Complaint, ¶ 9.) McCrory has performed her job as Forensic Manager satisfactorily at all times. (Complaint, ¶ 10.)

On September 4, 2015, McCrory filed a civil action against County, Santa Barbara County Superior Court case number 15CV02871, alleging generally that the County defamed McCrory. (Complaint, ¶ 8.)

While McCrory was employed by County, she made multiple disclosures or complaints to her employer that it was violating state rules, regulations, or statutes, including: (1) that the County was improperly accepting funds from the State of California by misrepresenting its status as a Full Service Partnership contrary to the requirements of the California Mental Health Services Act; and (2) that the County was improperly providing medication-assisted treatment to clients. (Complaint, ¶ 46.)

County’s decision to terminate McCrory’s employment on August 12, 2016, was motivated by McCrory’s complaints and disclosures. (Complaint, ¶ 47.)

On December 13, 2016, McCrory, through her counsel, gave notice of her potential wrongful termination claim to Deputy County Counsel Michael Youngdhal by letter, which referenced the dispute in the Shawn Terris case as to exhaustion of internal administrative remedies and stated:

“If you contend that Ms. McCrory is obligated to exhaust any sort of County internal administrative remedies, or she is obligated to exhaust any other administrative remedies, we are prepared to do so. I therefore request that you state the County’s position as to whether or not Ms. McCrory is obligated to exhaust any internal County administrative remedies, including but not limited to matters before the County [Equal Employment Opportunity Office (EEO)] office or the Civil Service Commission, and if so, what remedies Ms. McCrory is obligated to exhaust. We intend to rely on this decision and we will exhaust any remedies the County feels we obligated to exhaust, notwithstanding our position that there are no applicable administering internal or external administrative remedies which Ms. McCrory needs to exhaust.” (Complaint, ¶ 11 & exhibit A.)

On December 19, 2016, Deputy County Counsel Martin McKenzie responded by email: “As for your question regarding the County’s internal administrative remedy process, it hasn’t changed, and I expect that the County’s position on exhaustion in this case will be consistent with its position in previous cases.” (Complaint, ¶ 12.)

On December 20, 2016, McCrory, through her counsel, responded, stating that County’s position has been inconsistent as between McCrory’s prior case and the Terris case and concluding: “Please tell me if the County expects us to go through the CSC, this looks like you are setting a trap.” (Complaint, ¶ 13 & exhibit B.)

On January 18, 2017, McCrory, through her counsel, sent a letter to the County EEO requesting an investigation into the facts and circumstances of McCrory’s separation from employment with County. (Complaint, ¶ 14 & exhibit C.) The letter also states:

“Ms. McCrory also requests clarification as to whether or not the Santa Barbara County Equal Employment Opportunity Office is the proper forum for this complaint. On December 13, 2016, I corresponded to County Counsel Michael Youngdahl, Esq., asking for clarification as to whether it was the County’s position that a complaint before the County Civil Service Commission — for which this complaint would be a necessary prerequisite — was required in light of previous litigation experience of counsel. (See December 13, 2016 correspondence attached.) In response, County Counsel Martin McKenzie provided a cryptic response (‘As for your question regarding the County’s internal administrative remedy process, it hasn’t changed, and I expect that the County’s position on exhaustion in this case will be consistent with its position in previous cases’) to which I objected: ‘I’m sorry Marty that doesn’t help. The County said exhaustion was required for Terris but not exhausted for McCrory’s defamation claim. Please tell me if the County expects us to go through the CSC, this looks like you are setting a trap.’ (See email thread dated December 19 and December 27, 2016, attached.) I have not received any further communication. [¶] It is our position that this complaint is not required under California Labor Code §244, subdivision (a), which provides, ‘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….’ Labor Code § 1102.5, the state law basis of Ms. McCrory’s claims, makes no such express requirement. However, in light of the County’s ambiguous and contradictory position with respect to the necessity of making this claim, Ms. McCrory does so in an abundance of caution.” (Complaint, ¶ 14 & exhibit C, underscoring omitted.)

On May 5, 2017, McCrory, through her counsel, wrote to Kristi J. Johnson, Equal Opportunity Manager for County stating: “Having been unable to obtain a definitive response from County Counsel on whether Ms. McCrory is obligated to exhaust her administrative remedies with respect to her claim of unlawful termination as described in my letter dated January 18, 2017, Ms. McCrory has no choice but to submit the matter of her termination to your office for an investigation in order to exhaust any administrative remedies the County may at some point claim she obligated to exhaust. [¶] Accordingly, please consider this letter a request to reopen investigation into her matter and advise me of the next steps.” (Complaint, ¶ 15 & exhibit D.)

On June 13, 2017, Johnson and McCrory met for a brief interview directed toward to the topic of whether the County EEO office had jurisdiction over McCrory’s claim under Labor Code section 1102.5.

On June 23, 2017, McCrory, through her counsel, wrote to Johnson: “As we discussed, I am waiting your decision as to whether or not your office has jurisdiction to investigate claims of whistleblowing that will be brought under Labor Code § 1102.5. If you do, we will continue with the process, but if not, we won’t because we can’t. [¶] Second, and although we did not request at that time, we would appreciate knowing whether you have a position as to whether Ms. McCrory is obligated to exhaust administrative remedies before she may initiate civil litigation on that same theory. Your anticipated cooperation in this regard is appreciated.” (Complaint, ¶ 18 & exhibit E.)

On August 4, 2017, McCrory and Johnson met for an interview. (Complaint, ¶ 19.)

On August 5, 2017, County made a proposal relating to waiver of McCrory’s retaliation complaint with the EEO and the County’s affirmative defense related to exhaustion of the EEO process. (Complaint, ¶ 20.) On October 6, 2017, McCrory, through her counsel, responded to the proposal, agreeing in part. (Complaint, ¶ 21.) On October 10, 2017, counsel spoke and agreed the attorney Youngdahl would draft a stipulation for review incorporating what the County was prepared to agree to. (Complaint, ¶ 22.)

On November 3, 2017, McCrory filed a claim against a public entity pursuant to Government Code section 905 et seq. (Complaint, ¶ 23 & exhibit F.) On December 11, 2017, County served its notice of denial of the claim. (Complaint, ¶ 24 & exhibit G.)

On December 15, 2017, attorney Youngdahl, who had not yet prepared a stipulation, wrote: “At the end of the [October 10, 2017] conversation, we agreed that I would draft a stipulation for your review incorporating what the County was prepared to agree to. We did not agree to anything during our conversation. While I was preparing the stipulation, Ms. McCrory filed her Claim with the County. [¶] To be clear, the County’s position has been and remains that Ms. McCrory had available to her, and was required to exhaust, internal remedies offered by the County’s EEO Office and Civil Service Commission (which potentially could require her to also exhaust her judicial remedies depending on the outcome) before she could seek damages in a civil action under Labor Code section 1102.5. By filing her Claim, Ms. McCrory has voluntarily abandoned pursuing those County internal remedies and, accordingly, any cause of action she asserts under Labor Code section 1102.5 should be barred for failure to exhaust her administrative remedies.” (Complaint, ¶ 25.) As a result, County waived any administrative exhaustion requirements. (Complaint, ¶ 26.)

On March 15, 2018, McCrory filed her complaint in this action against County asserting three causes of action: (1) discrimination based on disability; (2) discrimination based on medical condition; and (3) violation of Labor Code section 1102.5.

County now demurs to the third cause of action on the grounds that McCrory has failed to exhaust her administrative remedies.

Analysis:

“We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed. [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]” (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6, internal quotation marks omitted.)

(1) Request for Judicial Notice

County requests that the court take judicial notice of: (exhibit 1) Santa Barbara County Ordinance 27-30; (exhibit 2) Santa Barbara County Civil Service Rules, rule 5, section 508, and rule 13, sections 1301 through 1325; and, (exhibit 3) a July 5, 2017, email from Kristi Johnson to plaintiff’s counsel.

There is no objection to judicial notice as to exhibits 1 and 2 and the court will take judicial notice of the ordinance and rules. McCrory objects to exhibit 3 as an improper matter for judicial notice.

Exhibit 3 is an email dated July 5, 2017, to plaintiff’s counsel, attorney James Cordes. The email states in relevant part:

“I hope that you enjoyed a wonderful 4th of July. Thank you so much for your patience as I consulted with those within the County to determine whether or not the County of Santa Barbara’s EEO Office investigates whistleblower complaints. Based upon my consultations with individuals who have historical knowledge of the EEO Office’s practices (since I have been on the job for just over six months), it is my understanding that the EEO Office conducts whistleblower investigations in addition to investigations for complaints alleging discrimination and harassment. [¶] If you and Ms. McCrory are interested in pursuing an EEO investigation of Ms. McCrory’s whistleblower retaliation and disability discrimination concerns, please let me know and we can schedule time to meet so that I may learn all of Ms. McCrory’s concerns.”

County requests that the court take judicial notice of exhibit 3 as an official act under Evidence Code section 452, subdivision (c), which provides: “Judicial notice may be taken of the following matters to the extent that they are not embraced within Section 451: [¶] … [¶] (c) Official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.” The court denies the request for judicial notice as to exhibit 3 for two reasons. First, there is insufficient evidence for the court to determine that the email is an “official act” within the meaning of section 452, subdivision (c). Not every statement or action of a government employee is an official act under this section. (See Childs v. State of California (1983) 144 Cal.App.3d 155, 162 [declaration by government employee describing general mailing practice of government agency is not an official act subject to judicial notice].) Second, the communication that is exhibit 3 is ambiguous and has meaning as argued by County only by interpretation. Judicial notice cannot be taken of the meaning of exhibit 3. (See Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.) On its face, exhibit 3 is an expression of an opinion of information that is outside of the exhibit 3 author’s personal knowledge and based upon the hearsay statements of other persons. (See Stencel Aero Engineering Corp. v. Superior Court (1976) 56 Cal.App.3d 978, 987, fn. 6.) While exhibit 3 may have some evidentiary value as a communication in a different proceeding where properly presented, it is not subject to judicial notice for purposes of resolving this demurrer.

The court also denies County’s request in reply that the court take judicial notice of the amended complaint in McCrory’s earlier action. While court records are within the scope of judicial notice (Evid. Code, § 452, subd. (d)), the court does not ordinarily permit new evidence to be asserted in reply. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.) This item could easily have been asserted with the moving papers.

(2) Terris Case

The basis for this demurrer is County’s argument that McCrory has failed to exhaust her administrative remedies to bring this action. The recent decision of the Court of Appeal in Terris v. County of Santa Barbara (2018) 20 Cal.App.5th 551 (Terris) is most directly on point to this argument.

In Terris, the plaintiff was a County employee subject to civil service rules. (Terris, supra, 20 Cal.App.5th at p. 553.) After receiving a layoff notice, the plaintiff asserted a right to remain employed by displacing a person in another position, but County determined that the plaintiff was not qualified for the position and laid her off. (Id. at pp. 553-554.) The plaintiff filed a complaint with County’s Civil Service Commission, alleging that the termination procedure violated her seniority rights and that the County had discriminated against her for exercising her rights as a County employee. (Id. at p. 554.) The Commission ruled that it could decide whether the County had followed the proper procedures for terminating the plaintiff, but could not decide the discrimination claim because the plaintiff had not exhausted her administrative remedy of filing a discrimination complaint with the EEO. (Ibid.) The Commission later found that the proper procedures had been followed and the layoff authorized. (Ibid.) The plaintiff then filed a wrongful termination and employment discrimination action. (Ibid.) The trial court granted the County’s motion for summary judgment finding, among other things, that the plaintiff had not exhausted her administrative remedies. (Ibid.)

The Terris court affirmed the trial court’s ruling that the plaintiff did not exhaust her administrative remedies before filing her wrongful termination action alleging violations of Labor Code sections 1101, 1102, and 1102.5. (Terris, supra, 20 Cal.App.5th at p. 553.) The count noted: “[The plaintiff] was required to file an EEO complaint, and if she disagreed with the EEO report, she could file ‘an appeal directly to the [Commission].’ The EEO investigates employment discrimination based on violations of sections 1101, 1102, and 1102.5. The civil service rules provided her with ‘the right to challenge the alleged discrimination … before the Commission….’ [The plaintiff] could have subpoenaed witnesses to testify at an evidentiary hearing. She could have sought judicial review of the Commission’s decisions on her discrimination claims through administrative mandamus. The Commission had the authority to reinstate her and order back pay and attorney fees if it so decided. [¶] [The plaintiff] acknowledged she ‘did not file an EEO complaint prior to pursuing claims for violation of [sections] 1101, 1102, and 1102.5.’ [Citations.]” (Id. at pp. 555-556.) The court concluded: “The Commission also advised [the plaintiff] and her counsel that if [the plaintiff] wanted to raise her Labor Code discrimination/retaliation issues, she first had to file an EEO complaint. Because she had not filed it, the Commission could only decide whether proper job termination procedures were followed. It offered her a continuance so that issue and the discrimination/retaliation issues could be decided together. But she and her counsel rejected that alternative and elected to have a Commission hearing only on the procedural issues. [The plaintiff] decided not to file the EEO complaint. Consequently, her section 1101, 1102, and 1102.5 claims are barred.” (Id. at p. 559.)

(3) Exhaustion of Administrative Remedies

The sole issue of this demurrer is whether the claims in the third cause of action for violation of Labor Code section 1102.5 are barred by McCrory’s failure to exhaust administrative remedies under the allegations of the complaint. Addressing the same civil service rules and system, the Terris court concluded that there is an internal administrative remedy that must be exhausted before McCrory could file this action with respect to Labor Code section 1102.5.

County argues that McCrory has not alleged exhaustion of administrative remedies except in conclusory terms that conflict with specifically alleged facts. In opposition to the demurrer, McCrory argues that exhaustion of administrative remedies is an ultimate fact that has been alleged, that County waived McCrory’s administrative remedies, and that County is estopped from relying on its administrative exhaustion requirement.

There does not seem to be a factual dispute—either upon a fair reading of the complaint or upon a review of the parties’ arguments—that McCrory did not obtain a decision through an administrative process regarding her Labor Code section 1102.5 claim. Instead, McCrory alleges that, at that time, County would not commit to whether a section 1102.5 claim required EEO exhaustion or even if the EEO had jurisdiction to address a section 1102.5 claim. McCrory made multiple statements of concern that County was attempting to trap McCrory by its failure to make clear what process was required.

“ ‘ “[W]here an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.” ’ [Citation.] Administrative remedies include ‘internal grievance procedures’ provided by a public entity. [Citation.] County employees must exhaust internal administrative remedies that are provided in county civil service rules.” (Terris, supra, 20 Cal.App.5th at p. 555.) For purposes of demurrer, the court accepts as true the allegations of the complaint. The complaint, fairly read, alleges that after McCrory presented a governmental claim with County, County improperly characterized the presentation of the governmental claim as an intentional abandonment of her administrative remedies barring her claim. (Complaint, ¶¶ 23-25.) McCrory characterizes County’s action in various ways, all of which have the legal effect of excusing further administrative proceedings.

“The Government Tort Claims Act (Gov. Code, § 810 et seq.) requires that ‘[b]efore suing a public entity, the plaintiff must present a timely written claim for damages to the entity. [Citations.]’ [Citation.] ‘A claim relating to a cause of action for … injury to person[s] … shall be presented … not later than six months after the accrual of the cause of action.’ [Citation.] ‘Timely claim presentation is not merely a procedural requirement, but is … “ ‘ “a condition precedent to plaintiff’s maintaining an action against defendant” ’ ” [citations], and thus an element of the plaintiff’s cause of action. [Citation.]’ [Citation.]” (A.M. v. Ventura Unified School District (2016) 3 Cal.App.5th 1252, 1257.) It is therefore clear that the presentation of a claim is not the same as filing a judicial action for damages because the presentation of the claim is condition precedent to the filing of a judicial action.

“[A]n administrative remedy is exhausted only upon ‘termination of all available, nonduplicative administrative review procedures.’ [Citations.]” (Coachella Valley Mosquito and Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1080.) Taking McCrory’s allegations as true, McCrory has alleged that her administrative were exhausted or otherwise excused because County had effectively deemed further administrative proceedings as improper based upon County’s incorrect determination that the presentation of a government tort claim was McCrory’s abandonment of her administrative remedies and, by County’s reasoning, a voluntary abandonment of her judicial claims as well. Under the allegations of the complaint, the issue is whether further administrative review procedures were available. McCrory has essentially alleged that no further procedures were available because of County’s erroneous determination regarding the government claim presentation. The allegation is sufficient for pleading purposes to show exhaustion of administrative remedies.

County’s demurrer to the third cause of action will be overruled.