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Peggy Kropp v. California Highway Patrol

February 14, 2011

PEGGY KROPP, PLAINTIFF AND APPELLANT,
v.
CALIFORNIA HIGHWAY PATROL, DEFENDANT AND RESPONDENT.



Super. Ct. No. CVPT080002987

The opinion of the court was delivered by: Robie , J.

Kropp v. California Highway Patrol CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Plaintiff Peggy Kropp sued defendant California Highway Patrol (CHP) for intentional infliction of emotional distress, invasion of privacy, and violation of her constitutional rights by coercion. The lawsuit was based on conduct of CHP personnel while Kropp was working as the manager of a nonprofit store at the CHP academy in West Sacramento. The CHP filed a special motion to strike the complaint under Code of Civil Procedure section 425.16.*fn1

The trial court granted the motion, finding that the causes of action arose from protected activity and Kropp failed to demonstrate a probability of prevailing on her claims. On Kropp's appeal from the grant of the motion, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The CHP Academy Recreation Fund (the fund) was incorporated as a nonprofit entity "[t]o provide personal needs and supplementary recreational facilities" to CHP cadets, trainees, and others "through the operation of a nonprofit purchase and sales agency."

The fund is governed by bylaws that establish membership in and operation of the fund. Membership in the fund is automatic when a person becomes a member of the CHP. There are approximately 10,000 to 15,000 members in the fund. Exercise of the fund's power is vested in a board of five directors (the fund's board). The fund's board has the power to appoint and remove employees, set compensation, and "oversee the affairs and business of the corporation," and to "do all things necessary and proper for the control, management and operation of the corporation, its property and its affairs." A quorum, which consists of a majority of the fund's board, is needed to transact business. The president of the fund's board was Warren Stanley, a commander of the CHP academy in West Sacramento. Stanley's "superior" was CHP Chief Jim McLaughlin, who was not a member of the fund's board. CHP Lieutenant Scott Lynch was a member of a fund's board.

The fund derives its income from the operation of the CHP Academy Post Exchange (post exchange), a store at the CHP academy in West Sacramento. According to the fund's bylaws, operation of the post exchange is an "activit[y] engaged in by the corporation." Profits from the post exchange are used to purchase and maintain equipment at the CHP academy. Kropp was the retail manager of the post exchange.

In July 2005, several CHP personnel, including Stanley and McLaughlin "acting on behalf of the CHP," "embarked upon a campaign to have the CHP conduct an audit of the [post exchange] and to change the [fund]'s governing documents so as to make it subject to the CHP's control and oversight." Stanley and McLaughlin sought from Kropp the corporate and financial records of the fund and told her the CHP would conduct an audit of the fund's financial records. During this time period, "concerns were raised regarding the operation of the [post exchange]." Somebody had also alleged the post exchange was "an illegal operation," and had engaged in "'nefarious' acts." As the president of the fund's board, Stanley felt "it was [his] duty to investigate those concerns." Kropp opposed these actions because the fund was not a state agency and the CHP had no authority to review or monitor the fund's financial dealings. In July 2005, the fund's board voted against conducting such an audit.

Over the next several months, CHP personnel sought the corporate and financial records of the fund and the private personnel records of the fund's employees.

On September 8, 2005, McLaughlin asked Kropp how much money was in post exchange bank accounts, who made decisions about spending that money, and what could be purchased with that money. When Kropp asked if she should be worried about the security of jobs of the post exchange employees, he said, "'no.'"

On September 12, 2005, Stanley forwarded Kropp an e-mail in which McLaughlin demanded that certain tasks be performed, including changing the fund's bylaws, preparing a business plan, calling a special meeting, and obtaining personnel information. If complied with, these demands would "essentially transfer control of the [fund] and the [post exchange] from the [fund's board] to the CHP." After reviewing the e-mail, Kropp met with Stanley to discuss her concerns about the CHP's impending audit of the post exchange. Stanley told her not to discuss the matter with the fund's board.

At the end of September 2005, Kropp turned over to an audit team from the CHP's internal affairs department all the post exchange's financial information and meeting minutes from 2002 to 2004. Kropp felt she "had no choice but to turn over the requested documentation." On October 31, 2005, and November 1, 2005, the CHP's internal affairs audit team requested more information from Kropp.

On November 2, 2005, Kropp met with the internal audit team, including Stanley. She "expressed concern over the privacy rights of the [post exchange] employees." After the meeting, she left a telephone message for one of the CHP commissioners (Brown) because she "wanted to ask him if he knew any particulars about the direction of the CHP audit team and if there was any information that was being kept from [her]." In the afternoon, Stanley instructed her by telephone to gather "all employment records" and "'hand over whatever they are requesting.'" When she questioned him and told him she had called Commissioner Brown, Stanley "exploded" and ordered her to his office. When Kropp reported to his office, Stanley told her he was "talking to [her] as [her] boss," chastised her for "jump[ing] the chain of command," and told her she had put him in a "bad situation." Kropp responded that she "did not have a chain of command as [she] did not work for the CHP and as the manager of the [post exchange], [she] did not have to answer to the CHP. [She] further explained that [she] felt [she] had no choice but to call Commissioner Brown given that Captain Stanley had never advised [the fund's board] of what had been transpiring with respect to the CHP's audit of the [post exchange] and had forbidden [her] from discussing it with the [fund's board] . . . ." "At that time, [she] told Captain Stanley that [she] was going to make it easy for him and just resign . . . ." He asked her not to, but she said there was nothing he could do to prevent it. Kropp told Stanley she was "disappointed in him" in his desire to keep things secret from the fund's board and his behavior was contrary to his fiduciary duties. Stanley did not respond.

Later that day, Stanley came to Kropp's office with another CHP commissioner. Kropp stated the CHP should not be involved in the audit. The CHP commissioner agreed that the reason for the audit, i.e., the post exchange was "an illegal operation" had proven untrue, but he felt that a financial audit would still be "'beneficial.'" Again Stanley asked Kropp not to resign, and this time she agreed.

On November 4, 2005, Stanley met with Kropp. He apologized for his conduct on November 2 and said the decisions he had been making were in his capacity with the CHP and not as president of the fund's board.

On November 17, 2005, Kropp attended a meeting with Stanley and others regarding the "status and direction of the audit." The meeting began with McLaughlin stating that "he was having language added to the [post exchange] lease stating the [post exchange] would be subject to CHP rules," including giving one of the CHP commissioners "final approval over any action or decision made by the [fund's board]." The CHP attorney stated that if the post exchange did not agree to the terms set forth in the revised lease, "'We will shut you down.'"

The audit commenced in January 2006 and continued through February 2006. On January 18, 2006, Kropp turned over the documentation requested, including employee personnel files. The audit proceeded despite the CHP's knowledge that the post exchange was not an illegal operation.

In March 2007, Lynch, on behalf of the CHP commissioner's office, asked Kropp to photocopy information regarding her salary that was contained in the fund's board meeting minutes. She told Lynch she did not have any obligation to turn over anything to the commissioner's office because it was not part of the fund's board, and he said, "'I know.'" She ended up photocopying the documents and leaving them on Lynch's desk because she believed that if she refused, she would be deemed "'difficult.'"

At the end of March 2007, Kropp left work "due to the increasing and unbearable stress of the CHP's intrusion and interference into the [fund's board] and [post exchange] operations, as well as [her] personal information."

DISCUSSION

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