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Chang v. County of Los Angeles

California Court of Appeals, Second District, Fifth Division

June 1, 2016

DAVID CHANG et al., Plaintiffs and Respondents,
v.
COUNTY OF LOS ANGELES, Defendant and Appellant

          APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC479858, Kevin Clement Brazile, Judge. Reversed.

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         COUNSEL

         Hurrell Cantrall, Thomas C. Hurrell and Melinda Cantrall for Defendant and Appellant.

         Green & Shinee, Elizabeth J. Gibbons and Amanda J. Waters for Plaintiffs and Respondents.

         Opinion by Kriegler, J., with Turner, P. J., and Baker, J. concurring.

          OPINION

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          KRIEGLER, J.

          [204 Cal.Rptr.3d 294] A public entity employer provided a defense for three employees under a reservation of rights, then refused to pay the resulting judgment for battery and civil rights violations on the ground that the employees acted with actual malice. The employees sought indemnification from their employer under Government Code section 825.[1] The trial court granted summary [204 Cal.Rptr.3d 295] judgment in favor of the employees. On appeal, the public entity contends that because the defense was conducted under a reservation of rights, the employees had to satisfy the requirements of section 825.2 for indemnification. We hold that section 825.2 applies when a public entity employer provides a defense under a reservation of rights that includes reservation of the right not to indemnify for acts committed with actual fraud, corruption or actual malice. An employer's reservation of the right to indemnity from the employee for acts committed with actual fraud, corruption or actual malice is necessarily a reservation of the right not to indemnify the employee for such acts. We reverse the judgment with directions.

         FACTS AND PROCEDURAL BACKGROUND

         On November 5, 2007, Los Angeles County Sheriff's Deputies David Chang, Anthony Pimentel, and Kris Cordova assaulted inmate Alejandro Franco, including using pepper spray on his anus and genital area. Franco brought an action against the deputies for battery and civil rights violations under 42 United States Code section 1983. ( Franco v. Gennaco (C.D.Cal., Aug. 11, 2015, No. LA CV 09-00893-VBF-FFMx) ( Franco ).)

         The deputies signed agreements with the County of Los Angeles (County) setting forth the terms and conditions under which the County would defend them. The first paragraph of each agreement listed circumstances under which the County might withdraw from defending a deputy, including if the County determined he did not act within the scope of his employment under section 995.2, subdivision (a)(1), or he acted or failed to act because of actual fraud, corruption, or actual malice under section 995.2, subdivision (a)(2).

         The second paragraph stated circumstances under which the County might not indemnify the deputy: " In defending you, the County reserves its right not to pay any judgment, compromise or settlement on your behalf until it is established that the injury arose out of an act or omission occurring within the scope of your employment as an employee or officer of the County. The County also will not pay any party of a claim or judgment that is for punitive or exemplary damages. (Section 825(a).)"

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         The third paragraph stated circumstances under which the County might seek indemnification from the deputy: " If the County pays any claim or judgment, or any portion thereof, for an injury arising out of your act or omissions, the County may recover the amount of such payment from you unless you establish that the act or omission upon which the claim or judgment is based occurred within the scope of your employment as an employee or official of the County, and the County fails to establish that you acted or failed to act because of actual fraud, corruption or actual malice, or that you willfully failed or refused to reasonably cooperate in good faith in the defense conducted by the public entity. (Section 825.6.)"

         The agreement ended with a recitation in capital letters, " I request and agree that the County may provide for my defense in the subject action, subject to the reservations set forth above. I agree to cooperate fully with the attorneys the County provides to me, and keep them advised at all times of my mailing address and telephone number."

         On September 9, 2010, following a jury trial, the jury found the deputies violated Franco's federal civil rights, causing injury or harm to him. The jury also found each of the deputies acted with malice, oppression or reckless disregard in violating [204 Cal.Rptr.3d 296] Franco's civil rights. In addition, the jury found each of the deputies committed battery on Franco while acting within the course and scope of their employment with the Los Angeles County Sheriff's ...


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