Government Liability Update

County Does Not Owe Homeowner Fiduciary Duty Regarding Proceeds of Tax Sale Held in Trust

in Hodges v. County of Placer, published October 29, 2019, the Third District Court of Appeal affirmed dismissal of a lawsuit after the trial court sustained a demurrer without leave to amend.  The plaintiff is the general partner of a partnership that purchased real property and a home in which the plaintiff lived. The county sold the property in a tax sale.  The plaintiff made a claim for the excess proceeds after the sale.  A year and eight months later, the plaintiff received a warrant for the excess proceeds.  The plaintiff contended the county did not adequately account for the funds it did not return.  He sued the county for breach of fiduciary duty and conversion.

The appellate court agreed with the trial court that the plaintiff did not have a cause of action.  Although the funds the county holds under statute after a tax sale, some of which are deposited in the general fund and others held for claimants such as plaintiff, are held in a "trust," there is no fiduciary duty between a property owner and the county regarding the funds.  The relationship of trust that is the hallmark of a fiduciary relationship is absent.  Neither the statutes nor the county charter impose a fiduciary duty upon the county.  The elements of conversion are not present, because the plaintiff did not have ownership of or right to possess the funds the county held, and because the county did not engage in any wrongful act concerning the funds.  It merely held and distributed the funds as provided by law.

Where Ongoing Accrual Applies, Demurrer Based on Statute of Limitations Is Improper

In County of El Dorado v. Superior Court (Austin), published October 30, 2019, the Third District Court of Appeal declined to grant a writ disturbing a trial court decision overruling the petitioner county's demurrer in a case seeking developmental impact fees under the Mitigation Fee Act for the county's alleged failure to make findings justifying continuing need for 11 fees.  The appellate court agreed with the county's argument that the statute of limitations for seeking the fees was one year.  But it further ruled that the theory of ongoing accrual applies to failure to make nexus findings for continued application of fees.  Therefore, only the portions of the causes of action that accrued more than a year before the action are barred.  Because a demurrer challenges an entire cause of action, not a portion, the trial court correctly overruled the demurrer.

New Legislation for 2020 Affecting Time to File Complaint with DFEH in FEHA Actions

AB 9, signed into law on October 10, 2019 and taking effect in 2020, extends the time for an employee suing for employment discrimination in violation of the Fair Employment and Housing Act to present a complaint to the DFEH from one year from accrual to three years.  The amendment provides that it does not revive lapsed causes of action.

New Legislation for 2020 Affecting Claims for Sexual Assault

On October 13, 2019, the Governor signed into law AB 128, which makes significant changes in both the statute of limitations for claims for childhood sexual assault, and the status of lawsuits against public entities for childhood sexual assault that were previously barred by the Government Claims Act.  The new laws go into effect January 2020.

Significant changes include:

• An amendment to Government Code section 905, which lists causes of action exempt from the Government Claims Act's claim-presentation requirements.  The current version of section 905, subdivision (m) excludes "Claims made pursuant to Section 340.1 of the Code of Civil Procedure for the recovery of damages suffered as a result of childhood sexual abuse. This subdivision shall apply only to claims arising out of conduct occurring on or after January 1, 2009."  AB 128 changes this language to:  "Claims made pursuant to Section 340.1 of the Code of Civil Procedure for the recovery of damages suffered as a result of childhood sexual assault."  The amendment thus changes the excluded cause of action from harassment to assault, and removes the cutoff date of January 1, 2009.  This change was made to address case law holding that childhood sexual abuse causes of action for which the statute of limitations for filing suit had not expired, due to changes in the statute of limitations, were nevertheless barred if the deadline for presenting a claim had expired.
• Multiple changes to Code of Civil Procedure section 340.1, the statute of limitations for childhood sexual abuse.  Among the changes:
  •  An expansion of the definition of childhood sexual abuse, which the amendment redubs childhood sexual assault.
  • An expansion of the statute of limitations for childhood sexual assault claims.  Under the current law, the deadline to sue is the age of 26 or three years after the discovery that psychological injury occurring after age 18 was caused by childhood sexual abuse.  The amendment extends the limitations period to age 40, or five years after the discovery of the childhood sexual abuse cause, whichever is later.
  • Subdivision (q) revives causes of action barred by the previous statute of limitations or the Government Claims Act:  "Notwithstanding any other provision of law, any claim for damages described in paragraphs (1) through (3), inclusive, of subdivision (a) that has not been litigated to finality and that would otherwise be barred as of January 1, 2020, because the applicable statute of limitations, claim presentation deadline, or any other time limit had expired, is revived, and these claims may be commenced within three years of January 1, 2020. A plaintiff shall have the later of the three-year time period under this subdivision or the time period under subdivision (a) as amended by the act that added this subdivision."
  • Subdivision (b)(1) provides for up to treble damages for plaintiffs who prove their sexual assault was the result of a "cover up," unless otherwise prohibited by law.  (Whether this provision applies to public entities, who are statutorily protected from punitive damages, remains to be seen.)

For Purposes of Design Immunity, Substantial Evidence That Design of Large, Obvious Bollard was Reasonable

In Dobbs v. City of Los Angeles, published October 16, 2019, the Second District Court of Appeal, Division 8 affirmed summary judgment in favor of the defendant city in a dangerous condition case.  The plaintiff walked into a round concrete bollard, 17.5 inches high and 17.5 inches wide, one of many surrounding the Los Angeles Convention Center to protect it from car bombs.  The trial court granted summary judgment based on design immunity.  

The appellate court ruled that the city established the elements of design immunity.  The first element was indisputably met.  A project manager's declaration that the city engineer approved the plans established discretionary approval.  The evidence does not have to be from the official who approved the plans.  Finally, there was substantial evidence that the design was reasonable.  As the court wrote, "It was big. It was designed to stop cars. It was obvious to pedestrians who looked where they were going."  The court concluded the opinion by writing, "Tort law incorporates common sense. When one walks into a concrete pillar that is big and obvious, the fault is one’s own."

A Public Employer Is Not Liable for Retaliation under Labor Code section 1102.5(c) Unless the Plaintiff Proves the Employer Actually Engaged in an Activity That Violates Law

In Nejadian v. County of Los Angeles, published October 1, 2019, the Second District Court of Appeal, Division 4, reversed a judgment after jury trial against the defendant county, and ordered judgment entered in the county's favor.  The plaintiff, an Environmental Health Specialist, alleged that he was retaliated against for declining to allow home rebuilding plans after a wildfire.  He alleged that county decisions approving the rebuilding plans violated the County Code.  He also alleged age discrimination.  He sued under Labor Code section 1102.5(c) and FEHA.  The jury found against the plaintiff on his age discrimination claims, but found retaliation against him under section 1102.5(c) and FEHA.

The appellate court ruled that the verdict on section 1102.5(c) retaliation was erroneous, because the plaintiff had failed to prove that the conduct he declined to participate in violated a statute, rule, or regulation.  labor Code section 1102.5(c) prohibits “[a]n employer, or any person acting on behalf of the employer, . . . [from] retaliate[ing] against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation."  The plaintiff has the burden of proving that the activity actually violates a statute, rule, or regulation.  That is a legal question for the court.  No findings of fact are necessary to decide it.  The court must decide that issue before the claim goes to the jury.  If the court decides the activity violates a statute, rule, or regulation, then the jury determines whether the plaintiff refused to participate and if so whether that refusal was a contributing factor in the defendant’s decision to impose an adverse employment action on the plaintiff.  The appellate court determined that the plaintiff failed to prove that the activities he declined to participate in violate a statute, rule, or regulation.  The appellate court also ruled that the trial court erred in instructing the jury that the plaintiff could prove FEHA retaliation by proving he was retaliated against for refusal to participate in activities that would violate statutes, rules, or regulations.  That is not a basis for FEHA liability.  The court also concluded that there was no substantial evidence that the county took adverse employment actions against him in retaliation for his refusal to participate in the alleged conduct.  Therefore, there was no need to remand the case for retrial.

Complaint Properly Pleads First Amendment Claim for Retaliation against Social Worker, but Defendant Entitled to Qualified Immunity against Fourth and Fourteenth Amendment Claims

In Capp v. County of San Diego, published August 30, 2019, the 9th Circuit affirmed in part and reversed in part a district court order granting a motion to dismiss a 42 U.S.C. section 1983 suit by a father and his children against the defendant county and some of its social workers.  The complaint alleged that the county's Health and Human Services Agency received a referral that the minor children might be at risk of neglect and emotional abuse by the plaintiff father.  A social worker allegedly interviewed the children at school without the father's consent, then interviewed the father.  The father sent a letter to the agency criticizing the interview and the allegations.  The complaint alleges that the agency instructed the children's mother to apply ex parte to take custody of the children from the father.  The court rejected the application and rebuked the agency.  The father allegedly spoke to the head of the agency, who assured him the case would be closed.  The father then received a letter from the agency stating that the allegations against him were substantiated, and that the father had been placed on the Child Abuser Index.  He was later informed that in fact he was never placed on the index.  The complaint alleged that the agency acted in retaliation for the father's criticism of his interview, and violated his First Amendment rights and Fourteenth Amendment right to famial association.  The complaint further alleged that the interviews with the children violated their Fourth Amendment rights.  The court dismissed all claims.

In reviewing the First Amendment claim, the court focused on the coerced ex parte application, since the father was never actually placed on the Child Abuser Index.  Because the facts pleaded indicated both a lack of substantiated concern for the children's welfare and treatment different from other, similar cases, the father pleaded facts that would support an inference of retaliatory animus behind the defendant social worker's actions.  The threat of having the children taken away would have chilled a reasonable person.  Although the case would likely to be close, and the court emphasized the liberal pleading standard applied to pro se complaints, the court concluded that the father pleaded a claim for first amendment retaliation.  Since the law clearly established the right to be free from government action that would not have occurred but for retaliatory animus, the claim was not barred by qualified immunity.  But the facts pleaded were insufficient to state a claim under the Fourth Amendment for the children's interviews (particularly since the mother could have consented to them).  Further, the defendants would be entitled to qualified immunity as to the Fourth Amendment claim, because right of minor children to be free from unconstitutional seizures and interrogations by social workers has not been clearly established.   The plaintiffs also failed to state a plausible claim for violation of the Fourteenth Amendment, since the father did not actually lose custody of his children.

Transit Company Is Not Liable under Common-Carrier Statute for Fall Caused by Ordinary Risks of Busy Train Platform

In Churchman v. Bay Area Rapid Transit District, published August 28, 2019, the First District Court of Appeal, Division 5 affirmed dismissal after demurrer.  While the plaintiff was standing on a BART platform, the opening and closing of doors on opposite sides of the cars, partially inaudible and confusing public address announcements, and abrupt turns and moves by passengers trying to board a train created a confusing situation for the plaintiff.  These factors allegedly caused the plaintiff to lose her balance and fall.  The plaintiff sued the defendant district for violating its duty as a common carrier under Civil Code sectoin 2100 et seq.  The trial court sustained the district's demurrer without leave to amend.

The appellate court held that while the common carrier statutes may serve as a statutory basis for public entity liability, a common carrier's duty does not extend to protecting passengers waiting on or passing through a train platform from injuries caused by ordinary risks of a busy train platform.

Absent "Peculiar Condition," City Could Not Be Held Liable for Dangerous Condition of Public Property Because It Did Not Light a Crosswalk Better

In Huerta v. City of Santa Ana, published August 23, 2019, the Fourth District Court of Appeal, Division 3, ruling 2-1, affirmed summary judgment for the defendant city.  Three children, wearing black on Halloween night, were crossing a marked crosswalk leading to an elementary school when a speeding car struck and killed the children.  The driver later pleaded guilty to felony vehicular manslaughter.  The children's parents alleged that the crosswalk was a dangerous condition of public property.  They alleged that a large tree at the north end of the crosswalk, lit by a single light at the southern end, cast a shadow rendering the children invisible as they crossed.  They also argued that the speed limit of 45 miles per hour (25 miles per hour when children were present) was dangerous because it caused drivers to out-drive the reach of their headlights.  The trial court rejected these arguments and granted summary judgment.

The majority agreed.  Under case law, absent a statute or charter provision to the contrary, a city has no duty to light its streets.  An exception is where a "peculiar condition" of the property makes lighting necessary to make the street safe for travel.  The tree was not such a condition.  Since the sole light cast that night was on the opposite end of the crosswalk, any shadow the tree cast would necessarily be away from the street and toward the school.  It could not have created a shadow over the area of impact.  No other peculiar condition required lighting.  The posted speed did not encourage drivers to outdrive their headlights; it was only the maximum allowed speed, and did not change the basic speed law that required drivers not to drive at a dangerous speed given the visibility.  Further, the driver who struck the girls far exceeded the speed limit.

Statute of Limitations for Placement of Name on Child Abuser's List without Due Process Accrued upon Discovery

In Bird v. State of Hawaii, published August 23, 2019, the 9th Circuit affirmed dismissal of a 42 U.S.C. section 1983 complaint on statute of limitations grounds.  In 2007, the plaintiff's younger child died as an infant.  Authorities concluded that the child died due to maltreatment.  The defendant state put the plaintiff and her husband on a state registry of child abusers.  The state did not give plaintiff notice of doing so.  The husband confessed to prosecutors to harming the child, causing her death, and pleaded guilty to first degree murder.  The plaintiff was not a suspect.  The plaintiff regained custody of her older child, moved to another state, and remarried.  When she sought to adopt a child, she learned she was on the registry and so could not adopt.  In 2012, she contacted the state and requested an administrative hearing before the listing agency.  It offered her a limited administrative hearing, which she refused.  In 2013, she threatened litigation.  She filed her action for damages and injunctive relief, based on denial of due process, two years and two months after threatening litigation.  The district court ruled the action barred by the state's two-year statute of limitations on personal injury.

The 9th Circuit agreed.  Although the state statute of limitations for personal injury is applied to section 1983 actions, federal standards of accrual control. The discovery standard of accrual typically governs section 1983.  Under it, accrual occurs when the plaintiff knows or has reason to know of the injury that is the basis for the action.  The court rejected an argument that the plaintiff was faciallychallenging a statute, and that accrual did not occur until the statute was overturned.  That position would essentially abolish statutes of limitations for facial challenges.  The court also rejected the argument that there was a continuing violation during the time that she was on the registry.  Federal law has limited application of the continuing violation doctrine for individual claims, limiting the doctrine to hostile environment workplace claims.  The plaintiff therefore had knowledge of the injury giving rise to her suit no later than 2013, when she was denied the hearing she requested and threatened litigation.  A concurring judge opined that an injustice had been done to the plaintiff.