Lee v. West Kern Water District
5 Cal. App. 5th 606
| Cal. Ct. App. | 2016Background
- Kathy Lee, a cashier for West Kern Water District, was the unknowing victim of a staged/mock robbery planned by supervisors; the event caused psychological injury and a jury awarded $360,000 for assault and intentional infliction of emotional distress.
- The trial was bifurcated: Phase 1 asked whether the workers’ compensation exclusivity rule barred the tort claims (CACI No. 2800 and related instructions); Phase 2 addressed liability and damages. The jury found the case fell outside the workers’ compensation scheme and returned verdicts for Lee.
- Defendants moved for judgment notwithstanding the verdict (JNOV) and for a new trial. They relied on a prior workers’ compensation stipulation/award (Lee had accepted WC benefits for a psychiatric injury arising out of employment) and argued judicial estoppel and instructional error.
- The trial court denied JNOV but granted a new trial, concluding the jury instruction on workers’ compensation exclusivity (CACI No. 2800) was improper because, the court thought, Lee’s complaint admitted the injury occurred in the course and scope of employment.
- The Court of Appeal reversed the new-trial order and affirmed denial of JNOV: it held the jury instructions (including a Fermino-based special instruction that employer conduct outside its proper role lies outside the compensation bargain) were correct and defendants forfeited judicial estoppel by failing to plead it timely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred by giving CACI No. 2800 and a Fermino-based special instruction permitting the jury to find the injury fell outside workers’ compensation | Lee: the evidence supported a Fermino theory — the mock robbery was outside the employer’s proper role so the injury did not arise out of employment; jury could decide industrial-causation | District: the complaint and prior WC award show the injury arose out of employment so exclusivity applied and the jury should not have been allowed to find otherwise | Held: instructions were correct; jury could find conditions of compensation did not concur under Fermino; trial court abused discretion in granting new trial |
| Whether Lee was judicially estopped from arguing the injury did not arise out of employment because she stipulated to that in her workers’ compensation proceeding | Lee: stipulating in WC was not evidence of bad faith or final concession; defendants forfeited judicial estoppel by not pleading it timely | District: prior stipulation and award preclude Lee from asserting an inconsistent position in tort suit | Held: trial court did not abuse its discretion in declining to apply judicial estoppel; defendants forfeited the defense and record didn’t establish bad-faith element |
| Whether exclusion of evidence of Lee’s receipt of workers’ compensation benefits (collateral-source evidence) was improper and prejudicial | Lee: collateral-source rule and risk of misleading jury justified excluding benefit amounts and receipt; any offset issues handled post-verdict | District: the WC award is highly probative that injury arose out of employment and exclusion prejudiced defense | Held: exclusion was permissible (collateral-source concerns); even if error, defendants failed to show prejudice because WC award alone does not resolve statutory elements |
| Whether JNOV should have been granted on coemployee/exclusivity grounds or for insufficiency of intent under assault exception | Lee: substantial evidence supported jury’s findings and Fermino rationale; defendants failed to prove exclusivity elements as jury found | District: verdict established coemployee scope and WC coverage so exclusivity required judgment for defendants; insufficient evidence of intent for assault exception | Held: JNOV denial affirmed — jury verdict supported by substantial evidence, and defendants’ arguments (including intent) were forfeited or not dispositive because jury found conditions of compensation did not concur |
Key Cases Cited
- Fermino v. Fedco, Inc., 7 Cal.4th 701 (1994) (employer conduct outside its proper role can place an injury outside the workers’ compensation bargain)
- Cole v. Fair Oaks Fire Protection Dist., 43 Cal.3d 148 (1987) (ordinary employer disciplinary actions remain within compensation bargain despite intentionality)
- Hart v. National Mortgage & Land Co., 189 Cal.App.3d 1420 (1987) (extreme harassment/physical molestation can be outside the normal risks of employment)
- Johns-Manville Products Corp. v. Superior Court, 27 Cal.3d 465 (1980) (exclusivity does not bar actions for fraudulent concealment by employer)
- MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc., 36 Cal.4th 412 (2005) (judicial estoppel is equitable and discretionary; elements include prior success and inconsistent positions)
- De Cruz v. Reid, 69 Cal.2d 217 (1968) (collateral source rule applied to workers’ compensation benefits in certain contexts)
- Lund v. San Joaquin Valley R.R., 31 Cal.4th 1 (2003) (discusses juries and instruction regarding workers’ compensation benefits and collateral-source considerations)