Government Code Section 996.4 Involved, With Employee Entitled To Introduce Evidence To Rebut “Outside The Scope” Defense By Government.
Public employees are entitled to be defended and indemnified for third party claims arising within the scope of their employment. The governmental employer has a choice: provide a defense/pay any claim or judgment against the employee or have the employee fund his/her own defense and sue for reimbursement of fees, costs, expenses, against governmental employee but be subject to no recovery if the conduct arose out of actual fraud, corruption, or malice. (Gov. Code, §§ 825 et seq., 996.4; Stone v. Regents of Univ. of California, 77 Cal.App.4th 736, 746 (1999).)
These principles were in play in Daza v. L.A. Community College, Case No. B261525 (2d Dist., Div. 8 May 6, 2016) (published).
What happened in Daza was that a student sued an L.A. Community College guidance counselor for sexual assault, a claim which was denied by employee. College District refused to defend employee, which triggered employee to file a cross-complaint for indemnify and reimbursement of fees in the sexual assault case. District settled the case with the student, but opposed employee’s defense cost reimbursement/indemnity suit on the ground that the mere allegations of sexual assault meant the employee’s actions were outside the scope of employment. A lower court dismissed the case after agreeing with District, a determination reversed on appeal by the 2/8 DCA.
The appellate court ruled that the section 996.4 reimbursement decision on “outside the scope of employment” was a factual question and cannot be determined based solely on the allegations of the plaintiff in a case against the employee—the employee was entitled to present evidence showing defense costs reimbursement was justified. Although the allegations did show conduct outside the scope of employment by a guidance counselor, employee must be permitted to present evidence to show the conduct was within the scope and did fall within the “no recovery” exceptions of section 996.4. Otherwise, there would be a lop-sided playing field: employer can present evidence on the issues but employee was limited to allegations about conduct being outside the scope. There also would be a pernicious policy “end result” by which a governmental entity could settle with the plaintiff and then insulate itself from 996.4 exposure to employee based solely on allegations by a party who had settled with the government and who would have no problem presenting pleadings which fell outside the ambit of 996.4.