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California Supreme Court: Defining the boundaries

By J. Clark Kelso

J. Clark KelsoThe law is full of fine distinctions, and being able to recognize those distinctions — to grasp where the boundaries are — is the common law lawyer’s stock in trade. This year’s decisions from the California Supreme Court involved an unusually large number of cases where the issue could fairly be framed as “A” or “B,” with the court’s opinion defining the boundary between those two choices.

Boundaries between crimes

There were four criminal law cases where the justices displayed their ability to draw fine distinctions that defined the boundaries of different crimes.

Consider first Magness v. Superior Court (2012) 54 Cal.4th 270, where the defendant had been charged with burglary because he used a remote control to open a motorized garage door. A burglary occurs when a person “enters any house … with intent to commit … larceny or any felony” (Penal Code Section 459), and it has long been settled that the slightest entry by any part of the body or an instrument is sufficient. But in Magness, the Supreme Court unanimously decided that since no part of the body and no instrument entered the house, there was no burglary. Electromagnetic waves from the remote clearly entered the house, but that was not good enough for the court’s members, who were looking for something physical to go from the outside to the inside of the house. So the defendant could be charged at most with an attempted burglary, not a completed burglary.

An example of something physical going from the outside to the inside was evident in People v. Yarbrough (2012) 54 Cal.4th 889, where the defendant climbed onto a second-story apartment’s private balcony, an open balcony surrounded by a metal railing some four feet in height and normally accessible only through the single bedroom’s sliding glass door. The defendant’s body is certainly something physical, but the question was whether climbing onto a balcony on the outside of the house actually involved going from the outside to the inside. The Court of Appeal had reversed the defendant’s conviction, concluding that an unenclosed balcony is not within a dwelling’s outer boundary. The Supreme Court saw the boundaries differently and unanimously reversed. The court concluded that a second-story balcony surrounded by a four-foot high railing is intended to be an extension of the living space and within the apartment’s outer boundary, since a reasonable person would believe that a member of the general public could not pass over the railing without authorization.

Burglary involves cases where something from the outside crosses over to the inside. But there are some crimes that exist only if the defendant is on the outside instead of being on the inside. The court faced that problem in People v. Manzo (2012) 53 Cal.4th 880, where the defendant was charged with violating Section 246 of the Penal Code, which makes it unlawful for “any person … [to] maliciously and willfully discharge a firearm at an … occupied vehicle.” The defendant was standing outside a vehicle but had thrust a gun into the vehicle at the time he fired the weapon, which killed someone inside the vehicle. The question here was whether the defendant was shooting “at” the vehicle, given that the firearm had already crossed the plane of the vehicle and was thus actually inside the vehicle at the time it was fired. Was the defendant shooting “at” the vehicle or shooting “within” the vehicle? Once again, the Court of Appeal had sided with the defendant, citing the rule of lenity and the ambiguity inherent in the word “at.” The Supreme Court unanimously reversed, noting that the evident focus of the statute was the special danger associated with shooting into a home or vehicle and that the danger did not magically disappear when a portion of a firearm passed through a door or window. Instead of focusing on the locus of the end of the muzzle, the focus should be on the location of the defendant, who clearly was outside the vehicle and, from that perspective, was shooting “at” the vehicle.

Not all boundaries are physical. In People v. Cornett (2012) 53 Cal.4th 1261, the court had to define the boundary between different ages, in particular, to define what it means to be 10 years of age. This is not as simple as you might think. Section 288.7 of the Penal Code makes it a felony, punishable by an indeterminate life term, for any adult to engage in specified sexual conduct “with a child who is 10 years of age or younger.” The Court of Appeal held that this language meant a child must have been molested prior to the day of, or on the day of, their 10th birthday. The Supreme Court unanimously reversed, essentially concluding that you remain 10 years of age until the day of your 11th birthday. In other words, “10 years of age or younger” is synonymous with “before your 11th birthday.” As the court explained, “in common parlance, a person reaches a particular age on the anniversary of his or her birth and remains that age until reaching the next anniversary of his or her birth.”

Fine distinctions are a wonderful thing, and, in fact, I feel about a year younger already.

Boundaries in victim restitution

Victims of crime are constitutionally entitled to restitution. Among other things, this means that the law of civil remedies is now part and parcel of our criminal justice system. Not surprisingly, we are starting to see a parallel body of remedies develop in the victim restitution context.

The first parallel involves an issue that vexed civil law for years — who recovers, if anyone, when the victim dies? At common law, there was no cause of action for wrongful death, and an action in favor of the estate or beneficiaries had to wait for legislative action in the form of wrongful death and survival statutes. The court faced the question of whether mandatory restitution was payable to the estate for economic loss when the victim of the crime died. In People v. Runyan (2012) 54 Cal.4th 849 the defendant, driving while intoxicated, killed another driver instantly in a freeway collision. The accident victim left no surviving family, dependents, or heirs. The issue before the Supreme Court was if, when, and to whom one convicted of a felony is required by the Constitution and statutes to pay restitution to the estate or personal representative of a deceased victim of a crime. Noting that the estate was not itself a “direct victim” of a crime that caused the decedent’s death, the court held that mandatory restitution was not payable to the estate for economic loss the estate itself has sustained as a result of the death. While a personal representative may be entitled to collect mandatory restitution on the decedent’s behalf for economic loss the decedent personally incurred before death as an actual victim of the defendant’s criminal conduct, there was nothing in the record to show that the decedent in this case, who was killed instantly, suffered any economic loss. So the Supreme Court reversed the entire mandatory restitution order that the trial court had entered.

The second parallel came in People v. Stanley (2012) 54 Cal.4th 734 where the court had to decide whether a victim could recover the cost of repairing a damaged truck even though the cost of repair substantially exceeded the market value of the truck. The usual remedies rule in California is that a plaintiff may recover the lesser of diminution in market value and cost to repair. This rule is designed to avoid economic waste. But the rule in restitution is now different. In People v. Stanley, a unanimous court held that a victim restitution order may direct the defendant to pay the victim the cost of repairing a damaged truck even though the cost of repair substantially exceeds the market value of the truck. In this case, the cost to repair was $2,800 while the market value was around $950. But don’t blame the court for this one. California’s victim restitution statute specifically authorizes an award of restitution for “the replacement cost of like property, or the actual cost of repairing the property when repair is possible.” Penal Code Section 1202.4(f)(3)(A). Applying the statute as written, the court held that the trial court has discretion to award cost to repair even when it exceeds market value because such an award means the victim “will have her truck back in the same condition it was before defendant vandalized it.”

Is this bill for real?

The holding in People v. Stanley is usefully contrasted with the court’s treatment of a similar issue in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, which involved the question of how to measure an injured plaintiff’s hospital bill when the hospital bills the patient one amount, but collects in full from the insurance company a lesser amount. When an injured person receives medical care for his or her injuries, the medical provider will often accept as full payment an amount less than that stated in the provider’s bill pursuant to preexisting contracts between the provider and the injured person’s health insurer. This raises the legal question whether the plaintiff can recover the full amount stated in the bill for services in his or her action against the tortfeasor, or whether the plaintiff is limited to the discounted amount actually paid by the insurer.

In Howell, the Supreme Court resolved the issue by holding that the plaintiff is limited to the discounted amount actually paid by the insurer and accepted by the medical provider as payment in full for the services rendered. The plaintiff had argued, and the sole dissenting justice contended, that a tort plaintiff may recover reasonable medical and other expenses, and that if the undiscounted bill was reasonable, that should be the measure of recovery. The majority rejected this argument, noting that if the plaintiff did not pay the full amount, and if the provider accepted the discounted payment as payment in full, there were no additional “expenses” incurred, and therefore no basis for a larger recovery. In short, the plaintiff must show both that the expenses were reasonable and that the expenses were actually incurred.

So the next time you see a hospital bill, don’t believe everything you read.

Boundaries in employer liability

An employer’s liability for the acts of those it hires quite often depends on legal boundaries. For example, the employees in Seabright Insurance Co. v. US Airways, Inc. (2011) 52 Cal.4th 590, found themselves on the wrong side of the boundary line. The employees worked for an independent contractor hired by the defendant. In Seabright, the court held that those contractor employees who were injured on the job cannot sue the party that hired the contractor to do the work, even when the party that hired the contractor failed to comply with workplace safety requirements concerning the precise subject matter of the contract. By retaining an independent contractor, the party that hired the contractor has delegated to the contractor all torts duties it would otherwise owe to the contractor’s employees to ensure the safety of the specific workplace that is the subject of the contract. The independent contractor relationship is a clear boundary line that separates the party that hired the contractor from the contractor’s employees.

Injured plaintiffs did a little better in C.A. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, where the court held that a school district under Section 815.2 of the Government Code could be held liable for negligent hiring and/or supervision which resulted in the plaintiff being sexually harassed and abused by a counselor. Factually, the case involved a high school counselor who harassed and abused a student. The student sued, and the superior court and Court of Appeal held that the school district could not be held vicariously liable for the counselor’s misconduct, which was outside the scope of her employment, and also could not be held liable under a negligent hiring or supervision claim. The Supreme Court unanimously reversed, permitting the plaintiff to move forward with his claim that the district can be held vicariously liable for the negligence of supervisory or administrative personnel who allegedly knew, or should have known, of the counselor’s propensities and nevertheless hired, retained and inadequately supervised her. The court reasoned that because school personnel owe students under their supervision a protective duty of ordinary care, if a supervisory or administrative employee of the district is proven to have breached that duty by negligently exposing the plaintiff to a foreseeable danger of molestation by his guidance counselor, liability may be imposed.

Not a good year for labor

We close our review this year with a quick look at cases involving labor law. It was not a great year for labor at the court, which suffered defeats in the following four cases:

The appellate courts are now filled with cases involving alleged failures to pay compensation consistent with the requirements of the Labor Code, particularly failure to pay overtime. In Harris v. Superior Court (2011) 53 Cal.4th 170, the court faced the question of whether the plaintiffs’ work as claims adjusters for an insurance company is “administrative” as that term is defined by the Labor Code, wage orders issued by the California Industrial Welfare Commission (“IWC”) and federal regulations. Under the law, persons employed in administrative, executive or professional capacities are exempt from the overtime compensation requirements. The Court of Appeal held that the plaintiffs’ work was not administrative as a matter of law (and, therefore, not exempt from the overtime rules) relying upon older case law recognizing a dichotomy between administrative work and production work. But the IWC had issued a wage order after those cases, which significantly clarified what constitutes administrative work, and the Supreme Court held that the new wage order supplied the proper legal test. It remanded to the Court of Appeal to take another look.

In addition to overtime litigation, we now see lots of cases involving meal and rest breaks. But the party may be over in this area of law because in Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, the court held that there is no statute which authorizes recovery of attorney fees by either party in a claim against an employer for missed meal and rest breaks. Since, as a general matter, a prevailing party may recover attorney fees only when a statute or a fee-shifting agreement so provides, it looks like employees wishing to bring a meal-and-rest-break case will have to pay their own way (absent a successful class action where the common fund theory may support an attorney fees award). This may be a result that will quickly draw the attention of the California Legislature, which, I suspect, would be inclined to expand the employee-only attorney fee provision in Section 1194 of the Labor Code to include claims for missed meal and rest periods.

Labor’s third loss came in United Teachers of Los Angeles v. Los Angeles Unified School District (2012) 54 Cal.4th 504, where the court held that collective bargaining provisions that are directly in conflict with provisions of the Education Code should not be subject to arbitration. The issue arose in the context of a decision by the district to approve the conversion of an existing public school into a charter school. The union argued that the conversion violated terms in the collective bargaining agreement and demanded arbitration, and the district resisted on the ground that the relevant provisions in the agreement were in conflict with state law regarding charter school conversions. Although the Supreme Court affirmed that provisions that are directly in conflict with state statutes should not be submitted to arbitration, the court remanded to the trial court for a fresh and more detailed consideration of what provisions in the collective bargaining agreement really were at issue and whether they conflicted with state law.

Finally, labor took another hit in State Building & Constr. Trades v. Vista (2012) 54 Cal.4th 547, where the court held that charter cities are not bound by state prevailing wage laws since the issue of the amount of wages to be paid to contractors on local public works is an issue involving “municipal affairs” and not a matter of “statewide concern.” The state prevailing wage law requires that certain minimum wage levels be paid to contract workers constructing public works. But the City of Vista had a city ordinance contradicting that requirement. Under the state Constitution, the ordinances of charter cities supersede state law with respect to “municipal affairs” (Cal. Const., art. XI, Section 5), but state law is supreme with respect to matters of “statewide concern.” The Supreme Court majority agreed with the city that this subject matter is a municipal concern.

J. Clark Kelso is a professor at the University of the Pacific McGeorge School of Law.