December 1999 Vol. 5 No. 12 ISSN 1087-6219
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In This Issue

• Juror misconduct cancels photographer's jury verdict against City for loss of RFK assassination photographs
• Defeat of summary judgment motion establishes defense to subsequent malicious prosecution suit
• No duty to protect junior lifeguard against uneven ocean floor
• Chapter 13 bankruptcy proceedings do not bar employment claims
• Ninth Circuit reiterates that Federal Arbitration Act does not apply to employment contracts
• UPDATES

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Juror misconduct cancels photographer's jury verdict against City for loss of RFK assassination photographs

The Second District Court of Appeal in Los Angeles has set aside a jury verdict against the City of Los Angeles for losing photographs of the Robert F. Kennedy assassination. Three of the jurors improperly concealed their bias against the City during voir dire.

On June 4, 1968, 15-year old Jamie Scott Enyart was taking photographs of Senator Kennedy when he was shot at the Ambassador Hotel. The Los Angeles Police Department detained Enyart as a possible witness and seized his film as evidence. After the conviction of Sirhan Sirhan for the assassination, Enyart's film, along with other photographic evidence, was sealed for 20 years.

In 1989, Enyart sued for loss of the film after the City said that it could not be found. In August 1995, the City found the film, but it was stolen from a courier's car as he was on his way to deliver the film to the courthouse. In December 1996, the trial court entered judgment against the City for $605,812. The Court of Appeal reversed the judgment, and ordered a new trial.

After the trial, five jurors had signed declarations stating that three of their fellow jurors made statements that demonstrated bias against the City and the LAPD. Those jurors had said that the City and the LAPD could not be trusted, because they always hide things and lie. Those statements contradicted their assurances during voir dire that they could be fair and impartial. Concealment of bias is serious jury misconduct, which warrants a new trial.

California Evidence Code section 1150 makes admissible evidence of objectively ascertainable statements, conduct and conditions in the jury room, but prohibits use of any evidence to show the effect of such matters on a juror. The juror declarations in this case were admissible, because they were offered to prove the statements made by the biased jurors, not to prove the effect of their bias on their deliberations or votes.

Enyart v. City of Los Angeles, 1999 WL 1073146 (Cal. Ct. App. Nov. 29, 1999).

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Defeat of summary judgment motion establishes defense to subsequent malicious prosecution suit

The Second District Court of Appeal in Los Angeles has ruled that denial of a summary judgment motion normally establishes the existence of probable cause to bring the lawsuit in a subsequent malicious prosecution action. The rule may not apply if the denial was induced by materially false facts.

Sentry Life had sued Alan Roberts in federal court to recover payments that it made to Roberts under two disability policies. The federal court denied Roberts's motion for summary judgment, based on a Sentry Life employee's sworn statement that Roberts had concealed facts about his income. Had Sentry Life known those facts, it would have acted differently. After a trial, the federal court found for Roberts.

Roberts sued Sentry Life and its attorneys in state court for malicious prosecution. Roberts had to prove that the defendants lacked probable cause to bring the federal suit, and that they prosecuted it maliciously. Sheldon Appel Co. v. Albert & Oliker, 47 Cal. 3d 863 (1989).

The court alone determines whether there was probable cause, based on an objective standard. The question is whether the claim was “legally tenable.” Probable cause exists unless a reasonable attorney would agree that the action was totally and completely without merit.

The denial of Roberts's summary judgment motion in the federal case showed that Sentry Life's case was not totally and completely without merit. In denying the summary judgment motion, the federal court determined that there were “genuine issues of fact” for trial. That implies that the federal judge found at least some merit in the claim.

In an earlier case, another court of appeal had declined to treat denial of summary judgment as conclusive proof of probable cause. Luchessi v. Giannini & Uniack, 158 Cal. App. 3d 777 (1984). However, at that time a malicious prosecution action could be based on bad faith prosecution of a claim that was objectively legally tenable. That changed with the California Supreme Court's decision in Sheldon Appel, which eliminated subjective bad faith from the probable cause element. Under the objective test announced in Sheldon Appel, denial of summary judgment in the earlier action will normally bar a malicious prosecution lawsuit.

There may be situations where the rule does not apply. For example, if the denial was induced by materially false facts submitted by the opponent of the motion, objective probable cause may still have been lacking. In this case there was no evidence that Sentry Life or its attorneys had induced the denial of summary judgment by submitting false evidence.

Roberts v. Sentry Life Ins., 1999 WL 1052047 (Cal. Ct. App. Nov. 22, 1999).

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No duty to protect junior lifeguard against uneven ocean floor

The Santa Ana division of the Fourth District Court of Appeal has ruled that a municipality has no duty to warn participants in one of its junior lifeguard programs about natural hazards at its beaches. The municipality is only liable if it increases the inherent risk of harm of ocean athletics.

13-year old David Lupash tripped and fell in the ocean during the final event of a junior lifeguard competition. His injuries rendered him a quadriplegic. Lupash sued the Cities of Long Beach and Seal Beach.

He claimed that they were responsible for his injuries, because they had chosen a site for the competition that posed an undue risk of harm. He also alleged that a Seal Beach lifeguard instructor acted negligently by instructing him to run as fast as he could, and to compete in the event even though he was exhausted. The trial court granted nonsuit for the cities, and the Court of Appeal affirmed.

Although California's coast poses a number of risks to beachgoers, California courts have consistently held that public entities do not owe a duty of care to provide safe beaches, or to warn against concealed dangers caused by natural conditions of the ocean. See, e.g., Knight v. City of Capitola, 4 Cal. App. 4th 918 (1992).

The negligent instruction claim did not fare any better. Under the doctrine of primary assumption of the risk, an athlete, even a junior one must accept the risks inherent in the sport. The only duty imposed on coaches and sports instructors is not to increase the risks inherent in the learning process undertaken by the student. Lilley v. Elk Grove Unified Sch. Dist., 68 Cal. App. 4th 939 (1998).

The Seal Beach instructor did not increase the risk of harm to Lupash. One of the risks of participation is that the instructor will push the athlete to the limits of his capabilities. There is no liability for such actions, unless they amount to intentional misconduct or recklessness.

Lupash v. City of Seal Beach, 75 Cal. App. 4th 1428 (1999).

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Chapter 13 bankruptcy proceedings do not bar employment claims

The First District Court of Appeal in San Francisco has ruled that a Chapter 13 debtor has standing to sue in his own right. Further, his failure to list his employment claims on his bankruptcy schedules did not estop him from suing on the claims in state court.

In June 1996, Edwin Kelsey filed an administrative complaint charging his employer, Waste Management, with harassment and discrimination. In July 1996, he filed a Chapter 13 bankruptcy petition. He did not list his employment claims on his bankruptcy schedules. The bankruptcy court confirmed his bankruptcy plan in April 1997. Shortly thereafter, he filed a state court lawsuit against Waste Management for discrimination and intentional infliction of emotional distress. The trial court granted summary judgment for Waste Management.

Waste Management argued that Kelsey lacked standing, because his property passed to the bankruptcy trustee, who has the sole authority to represent the bankruptcy estate, and to sue and be sued. However, a Chapter 13 debtor retains possession of the property of the estate, and has certain powers exclusive of the trustee. In a Chapter 13 bankruptcy, the creditors' recovery is dram from the debtor's earnings. Those facts make Chapter 13 bankruptcies different from Chapter 7 bankruptcies, in which the trustee takes possession of the property, and compensates the creditors through liquidation of the estate.

Waste Management also argued that judicial estoppel barred Kelsey's claims. The doctrine applies if (1) the same party has taken two positions (2) in judicial or quasi-judicial proceedings, (3) the party was successful in asserting the first position, (4) the two positions are totally inconsistent, and (5) the first position was not a result of ignorance, fraud or mistake.

Kelsey had successfully asserted an inconsistent position in the bankruptcy proceeding. However, he said that his failure to list the employment claims on his bankruptcy schedules was inadvertent. Therefore, there was a disputed issue of fact that prevented summary judgment.

Kelsey v. Waste Management of Alameda County, 1999 WL 1073600 (Cal. Ct. App. Nov. 29, 1999).

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Ninth Circuit reiterates that Federal Arbitration Act does not apply to employment contracts

The Ninth Circuit has ruled again that its district courts lack authority to compel arbitration of matters embraced within employment or labor contracts, because the Federal Arbitration Act (FAA) does not apply.

In Craft v. Campbell Soup Co., 177 F.3d 1083 (9th Cir. 1999), the Court had ruled the FAA inapplicable to employment contracts. Such contracts are not “contract[s] evidencing a transaction involving commerce,” and are, therefore, outside the scope of 9 U.S.C. section 2.

In the present case, Circuit City provided its existing employees with an Associates Issue Resolution Program package. The materials in the package explained that any employee who did not return an opt-out form within 30 days would automatically be required to arbitrate all employment-related legal disputes.

The district court granted Circuit City's petition to compel arbitration of a dispute with an employee who had not returned the opt-out form. The Ninth Circuit reversed on the basis of Craft. The receipt of the package and the failure to opt out created an employment contract, which was outside the scope of the FAA.

Circuit City Stores, Inc. v. Ahmed, 1999 WL 1041833 (9th Cir. Nov. 18, 1999).

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UPDATES

Subsequent treatment of decisions reported on in earlier issues:

Aguilar v. Avis Rent A Car Sys., Inc. (September 1999 issue), petition for certiorari filed (Nov. 1, 1999).

Amos v. Alpha Property Management (August 1999 issue), rehearing denied (Aug. 17, 1999), review denied (Oct. 27, 1999).

International Business Machines Corp. v. Bajorek (October 1999 issue), now reported at 191 F.3d 1033 (9th Cir. 1999).

Keimer v. Buena Vista Books, Inc. (November 1999 issue), now reported at 75 Cal. App. 4th 1220 (1999).

Overly v. Ingalls Shipbuilding, Inc. (September 1999 issue), review denied (Nov. 10, 1999).

Stanley v. University of Southern California (July 1999 issue), cert. denied, 1999 WL 893590 (U.S. Nov. 29, 1999).

Swenson v. County of Los Angeles (November 1999 issue), now reported at 75 Cal. App. 4th 889 (1999), petition for review filed (Nov. 29, 1999).

Warden v. State Bar of California (October 1999 issue), rehearing denied (Oct. 20, 1999).

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