California Court of Appeals, Third District, Sacramento
APPEAL from a judgment of the Superior Court of Sacramento County Super. Ct. No. 07AS00377 Lloyd A. Phillips, Judge.
Ryan and Fong, Timothy J. Ryan; Demas and Rosenthal, Steven Schultz; Gerald Glazer; Emry J. Allen for Cross-complainant and Appellant.
Pagliero & Associates, James R. Pagliero for Cross-defendant and Respondent.
As the result of drinking too much water in an ill-conceived radio contest, a woman died. Plaintiff Matt Carter had helped conduct the contest as part of his duties as an employee of defendant Entercom Sacramento, LLC, the company that owned the radio station. Although Entercom told Carter it would provide legal counsel for him, Carter chose to hire his own attorney. When the woman’s family sued Carter (as well as Entercom and others), Carter tendered defense of the action to Entercom’s insurer. The insurer accepted the tender without any reservation of rights and appointed a different attorney to represent Carter. Carter refused that attorney and insisted on being represented by the attorney he had chosen. When the insurer refused to pay for that attorney, Carter filed a cross-complaint against Entercom seeking indemnity under Labor Code section 2802 for the fees and costs he incurred. Subdivision (a) of section 2802 requires an employer to indemnify its employee “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.”
At the outset of the trial of Carter’s indemnity claim, the trial court denied Carter’s motion for leave to amend to allege a claim for quantum meruit and unjust enrichment. Thereafter, the court found that none of the fees and costs Carter incurred after the insurer appointed an attorney to represent him were necessary expenditures and therefore Carter was not entitled to indemnity for those fees and costs under section 2802.
On Carter’s appeal, we find no error. Contrary to Carter’s arguments, he did not have an absolute right to chose his own attorney to represent him at the expense of his employer or its insurer under section 2802. Nor did the fact that he faced potential liability for punitive damages and (for a time) potential criminal charges give him the right to insist that his employer or its insurer pay for the attorney he chose. Whether particular expenditures are necessary, and thereby subject to the duty of indemnity under section 2802, is a factual question, and here Carter has not shown that the trial court’s determination of that question lacked substantial evidentiary support. Nor has Carter shown that is was error to deny his request to allege a claim for quantum meruit and unjust enrichment, given that Entercom had no statutory duty to indemnify him after he refused the attorney Entercom’s insurer offered him. For these reasons, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
We take the initial facts from the trial court’s statement of decision:
“Carter was a part-time employee of Entercom Sacramento, LLC, working as an assistant to a morning radio program. On the morning of [January] 12, 2007, the morning program conducted a contest at the station for listeners called ‘Hold Your Wee for a WII.’... Jennifer Strange... was one of the participants in the contest which involved rewarding the contestant who could delay urinating the longest after drinking a large quantity of water. Strange died later that day from hyponatremia.
“Carter had been assigned by Entercom Sacramento, LLC, to assist with the contest that morning by passing out bottles of water to the contestant[s] at regular intervals and reporting the status of the contestants to the station’s on-air personalities.
“On January 16, 2007, Carter, as well as a number of other employees involved in the morning radio program, were fired by Entercom Sacramento, LLC. Carter and the other terminated employees were instructed that Entercom would provide legal counsel for them. Later that week, Carter retained attorney Gerald Glazer to represent him.
“On January 17, 2007, the Sacramento County Sheriff’s office announced that it was opening a criminal investigation into Strange’s death....
“On January 25, 2007, a complaint was filed by Strange’s family naming multiple defendants, including Carter [(case No. 07AS00377)]. Carter was served with a summons and the complaint on January 29, 2007. Carter tendered the lawsuit against him to the insurer for Entercom Sacramento, LLC, Vigilant Insurance Company (‘Vigilant’).
“Vigilant accepted Carter’s tender of defense, and on February 22, 2007, wrote Carter that it was appointing Charles Painter of the law firm of Ericksen, Arbuthnot, Kilduff, Day & Lindstrom, Inc.... to represent Carter.
“On February 25, 2007, Glazer wrote Painter and informed him that Carter preferred to have Glazer continue to represent him. On February 27, 2007, Painter wrote Glazer and recommended to Glazer that Carter allow Painter to represent him, and that Entercom Sacramento, LLC, had in excess of $50, 000, 000 in insurance coverage available, and that he would be defending Carter without any reservation of rights and without any conflict whatever. Carter responded that he wanted Glazer to continue to represent him.”
On April 2, 2007, the Sacramento County District Attorney announced that no criminal charges would be filed in Strange’s death.
In May 2007, three other contestants, including Lucy Davidson, filed a separate action against Entercom and Carter ...