Opinion
NOT TO BE PUBLISHED
APPEALS from judgments of the Superior Court of San Diego County No. GIC844311 Kevin A. Enright, Judge. Judgment in favor of defendant Jose Cisneros affirmed; judgments in favor of Remington College-Denver Campus, Inc. and Lennor Johnson
O'ROURKE, Acting P. J.
Plaintiff Terrance Peterson appeals from summary judgments in favor of his former employer, Remington College-Denver Campus, Inc. (Remington), and former supervisors Jose Cisneros and Lennor Johnson, on his complaint alleging wrongful termination in violation of public policy (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 (Tameny)) and other causes of action. During the litigation, Peterson purported to accept Remington's Code of Civil Procedure section 998 offer to compromise, but Remington rejected Peterson's acceptance and the trial court denied Peterson's motion to enter judgment on the offer. The trial court thereafter granted summary judgments in part on grounds Peterson had not shown his termination resulted from activity protected by an established or well known constitutional provision, statute, or government regulation, and Peterson's discovery admissions established the truth of defendants' assertedly defamatory statements.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
On appeal, Peterson contends the trial court erred in denying his motion for judgment on Remington's section 998 offer. Peterson further contends (1) his opposing summary judgment papers adequately identified statutory sources for a public policy violation, namely, the Private Postsecondary and Vocational Education Reform Act of 1989 (former Ed. Code, § 94700 et seq., hereafter the Reform Act), and the Maxine Waters School Reform and Student Protection Act of 1989 (former Ed. Code, § 94850 et seq., hereafter the Waters Act) and the court improperly applied the pari delicto doctrine to bar his Tameny cause of action; (2) he raised disputed facts on the issue of malice, the affirmative defense of truth, and Remington's vicarious liability for his defamation cause of action; and (3) he has standing to bring a cause of action under the Unfair Competition Law (UCL, Bus. & Prof. Code, § 17200 et seq.). Peterson finally argues the trial court's summary judgment ruling is inconsistent with a prior ruling denying Remington's motion for judgment on the pleadings.
The provisions of the Reform Act and Waters Act in effect during Peterson's employment became inoperative on July 1, 2007. (Stats. 2004, ch. 740 (S.B. 1544), § 7, see 28B pt. 4, West's Ann. Ed. Code (2008 supp.) under heading Private Postsecondary and Vocational Institutions (Repealed), pp. 1,5.)
We affirm the judgment in Cisneros's favor based on contradictory admissions made by Peterson in sworn discovery responses. We affirm the trial court's order denying Peterson's motion to enter judgment on his section 998 offer. However, we conclude Remington did not demonstrate it was entitled to judgment as a matter of law on Peterson's UCL cause of action, and Peterson presented evidence raising triable issues of material fact on his causes of action for wrongful termination against Remington and for defamation against Remington and Johnson. Accordingly, we reverse the judgments in Remington's and Johnson's favor with directions set forth below.
FACTUAL AND PROCEDURAL BACKGROUND
We set out the evidence in the light most favorable to Peterson, the party opposing summary judgment. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) Remington sets out its version of the facts, ignoring Peterson's opposing evidence on grounds it is inadmissible and his declaration contradicts his prior deposition testimony. Its opening brief reasserts most of the evidentiary objections it made in the trial court in an effort to prevent us from considering the vast majority of Peterson's opposing summary judgment declaration. Because the trial court did not expressly rule on Remington's objections and Remington did not press for a ruling, the evidence to which Remington objected is considered part of the record on appeal and its evidentiary objections are deemed to have been waived and not preserved for appeal. (See Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1186-1187, fn. 1 (Sharon P.), disapproved on another point in Aguilar, supra, 25 Cal.4th at p. 853, fn. 9; Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 670, fn. 1 (Ann M.); Demps v. San Francisco Housing Authority (2007) 149 Cal.App.4th 564, 566, 578-579 (Demps).) In any event, as we explain in part II(B), post, many of these objections, including as to Peterson's assertedly contradictory deposition testimony, lack merit.
In May 2003, Peterson was hired as a college recruiter for Remington's San Diego campus. Johnson was Peterson's direct supervisor. Cisneros, the campus president, supervised Johnson. In February 2004, Remington notified Peterson he was on probation for his failure to recruit 24 new students in the past quarter, and that his failure to achieve 24 "starts" for the next quarter or meet his weekly goals could result in termination of his employment.
Remington management placed a high degree of pressure on Peterson and other recruiters to meet their recruitment quotas. Peterson attended recruitment meetings at which Johnson and at times Cisneros "made it clear" to the recruiters that they had to meet their quotas in starting students and "needed to do 'whatever it takes' to get people enrolled." Johnson and Cisneros explained Remington received money from the federal government via student loans, and that the more students they recruited, the more money Remington collected from the government for tuition. Peterson was present when Johnson told other staff members to make sure students passed and Johnson often directed exam administrators to alter test results to ensure a passing grade. Other Remington employees were subjected to Johnson's requests; Katrina Shdeed, an administrative assistant at Remington who administered Remington's entrance exam, was directed by Johnson to allow a student to retake a test, and Johnson also told her on 10 to 15 occasions to change the test scores. She never did so. Other Remington employees told Shdeed they were subjected to the same demands. On these occasions, Johnson never directly told her to change the score, he would tell her to "make sure the student passes." Shdeed understood that Johnson wanted his "numbers," and "numbers equals money." Though she believed Johnson's requests regarding test scores were illegal, she never complained about it because she was an "easy person to get rid of and replace[]" and she was afraid of losing her job.
In October 2004, while Peterson was still on probation, Johnson approached him about changing a test score for a student (Lopez) who had failed the entrance exam three times, telling Peterson he needed to have her enrolled to activate her financial aid. Peterson and Johnson pulled her file and confirmed her score as nine out of 50, and Johnson then told him to change the nine to a "19" by putting a one in front of the nine so as to raise the score above 13, which was needed to pass. Johnson reminded Peterson he was on probation, which Peterson took as a threat of termination, especially since Lopez was a student he had recruited. Peterson believed that if he did not change the test score as directed, he would be fired in that Remington had a reason to fire him but would not do so as long as he cooperated in changing the test score.
Some time later, Peterson told Cisneros what had happened about changing Lopez's score; he told Cisneros he did not want to do it anymore and Johnson was pressuring him to do things like that to meet the recruitment quota. Cisneros told him not to worry about it; to be quiet about the whole thing and be thankful to another employee, Rob Halliburton, who was fired in April 2004 and had alleged in a complaint that he was terminated for complaining about unethical practices at Remington. Cisneros explained Remington wanted Peterson's actions in changing test scores to be kept confidential because of that lawsuit. Later, in a November 2004 meeting with both Johnson and Cisneros, Peterson repeated he had changed the test score at Johnson's direction, which Johnson did not deny. Both told him to " 'drop it' "; that they would forget about it and he would not be fired. Neither responded to Peterson when he told them he did not want to continue the conduct because it was dishonest.
On December 1, 2004, Peterson met with several Remington corporate officers and a person who had introduced himself as being from an "accreditation agency" about the Halliburton lawsuit. He answered questions about Halliburton's allegations of impropriety, and also reported that Johnson directed him to change a test score and that he overheard Johnson tell or suggest to other staff that they should falsify test score results so that the student passed regardless of his or her score. The corporate officers, including Remington's legal counsel, thanked him and told him he would not be fired or retaliated against for coming forward. However, on December 15, 2004, Peterson was called into a meeting with other Remington corporate officers and told his changing the student's test score in October 2004 was unacceptable and that he should sign a release and accept a $3,000 severance package. Peterson was fired two days later when he refused to sign the release.
In March 2005, Peterson filed a complaint against Remington, Johnson, Cisneros and other Remington-related entities alleging causes of action for wrongful termination in violation of public policy, retaliation under Labor Code section 1102.5, defamation, and violation of the UCL. Peterson alleged his termination was in violation of public policy and was done in retaliation for his cooperation with state auditors for purposes of his cause of action under Labor Code section 1102.5. In his defamation cause of action, Peterson alleged Johnson and Cisneros falsely and maliciously published to other Remington staff members, Remington officers and directors, and state auditors that he had acted alone in changing the student's test score, thereby injuring him emotionally and in his reputation. Peterson alleged defendants engaged in an unlawful, unfair and fraudulent business practice by requiring him and other Remington employees to change test scores of students applying for admission, enabling defendants to submit fraudulent financial loan applications for students who did not qualify to attend the institution. He alleged defendants' "practice of scamming the federal government by submitting phony financial aid requests violates the [Waters Act] . . . and the [Reform Act] . . . all of which are incorporated in [Education] Code [sections] 94700, et seq. and 94840, et seq." He further alleged the conduct violated the federal False Claims Act.
Remington, Johnson and Cisneros each moved for summary judgment or alternatively summary adjudication of issues. Remington argued Peterson's wrongful termination cause of action failed because he could not establish a violation of any established and well-known public policy, an essential element of that cause of action, and the evidence showed Peterson was fired for his own misconduct. Remington argued Peterson's defamation cause of action failed because the undisputed facts showed the alleged defamatory statements were subject to a qualified privilege and also were "substantially true." Finally, Remington argued Peterson's UCL cause of action failed because he could not prove Remington engaged in any unfair, deceptive or illegal business practices, nor could Peterson show he suffered damages as a result of any such business practice or use of any Remington product or service.
Peterson opposed Remington's motion in part by submitting his sworn declaration in which he described the circumstances of his termination. In part, Peterson averred that after he was fired, he was told by several people including Felicia Parker and Chris Tilley, a Remington corporate officer, that Cisneros and Johnson had communicated to the entire San Diego campus staff that he was fired for changing a test score and that he "acted alone in doing it." Tilley assertedly told Peterson in a telephone conversation that the information he received from Cisneros was that Peterson had acted alone; that Johnson had nothing to do with it and did not direct him to do it.
In addition to his sworn declaration, Peterson also submitted verified discovery responses showing that after Remington filed its motion, Peterson supplemented his form interrogatory responses to assert that Remington took adverse employment action against him in violation of public policies contained in the Reform Act and Waters Act. He alleged numerous additional material disputed facts in opposition to the motion, including matters related to the requirements and prohibitions of specific provisions of the Reform Act and Waters Act. In reply, Remington asserted numerous written objections to Peterson's declaration as well as other opposing evidence submitted by Peterson. It argued Peterson's declaration contradicted his deposition testimony in which he assertedly admitted Johnson never actually directed him to change any test score or told him he would be fired if he did not do so. Remington argued Peterson's sworn testimony demonstrated he "willingly engaged in wrongful conduct" and never confessed or complained to Remington corporate representatives until after Cisneros brought the matter to Remington's attention.
Johnson and Cisneros moved for summary judgment or alternatively summary adjudication of issues on grounds, among others, that Peterson's cause of action for defamation was barred by the defense of truth.
Stating it "considered only admissible evidence" in ruling on the motions, the trial court granted summary judgments in the defendants' favor. With respect to Remington, it ruled (1) Peterson did not allege any violation of the Waters Act nor had he shown that act's applicability with admissible evidence; (2) the evidence, including Peterson's deposition and opposing summary judgment declaration, did not show he had made any complaint to any state or governmental agency or official for purposes of his Labor Code section 1102.5 retaliation claim; (3) Peterson's defamation cause of action failed because he could not establish any publication regarding his changing a student's test score was not substantially true, not privileged, or that Remington was liable for the publication; and (4) Peterson could not establish he suffered damages as a proximate result of any unfair, deceptive or illegal business practice by Remington.
The trial court's approach of not expressly ruling on Remington's evidentiary objections was presumably based on the procedure sanctioned by the court in Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, which held a trial judge need not rule on each evidentiary objection, but could preserve the record by stating, "I am going to disregard all those portions of the evidence that I consider to be incompetent and inadmissible." (Id. at p. 1419, fn. 3.) This court has criticized such an approach (see Sambrano v. City of San Diego (2001) 94 Cal.App.4th 225, 236) and the Biljac court has now rejected its own opinion, holding instead that under Ann M., supra, 6 Cal.4th 666 and Sharon P., supra, 21 Cal.4th 1181, as well as most post-Biljac appellate opinions, a trial judge's failure to rule on properly presented objections results in their being deemed waived, the effect of which is that the objected-to evidence is included in the record for purposes of appellate review. (Demps, supra, 149 Cal.App.4th at pp. 566, 578.) Preservation of evidentiary objections for appeal under these circumstances is presently before the California Supreme Court in Reid v. Google, Inc. (2007) 155 Cal.App.4th 1342, review granted Jan. 30, 2008, No. S158965.
As for Johnson and Cisneros, the court ruled any statements by them that Peterson acted alone in changing the student's test score were not defamatory because the substance of their statements were true. The court entered judgments in favor of Remington, Johnson and Cisneros. This appeal followed.
Peterson does not challenge the summary judgment as to his second cause of action for retaliation based on protected whistleblowing under section 1102.5, subdivision (b) and thus we affirm summary adjudication of that cause of action.
DISCUSSION
I. Section 998 Offer to Compromise
A. Background
On September 6, 2005, Remington served an offer to compromise under section 998 providing it would pay Peterson $50,001 plus attorney fees and costs incurred as of the date of the offer "in exchange for plaintiff's delivery as hereinafter provided of a properly executed request for dismissal with prejudice of said action in its entirety as to all parties, and by execution and delivery to counsel for defendant of a release of all claims as to this defendant." The offer stated that Peterson could accept it by "mailing or delivering . . . a written notice of acceptance of this offer, together with the properly executed request for dismissal, with prejudice, within thirty (30) days from the date of service of this offer to compromise as indicated on the proof of service attached hereto" and, if not accepted in that manner, "said offer is withdrawn."
On October 6, 2005, Peterson served and filed a notice of acceptance of the offer, in part stating he "accepts your offer to allow a judgment to be entered in said Plaintiff's favor and against said defendant. . . ." (Underscoring omitted.) He attached a form request for dismissal with prejudice "[a]s to Defendant Remington College-Denver Campus, Inc. dba Remington College-San Diego Campus only." Thereafter, Remington's counsel advised Peterson no settlement had been reached because Peterson had not accepted the terms of the offer requiring dismissal of the entire action without entry of judgment.
Peterson eventually moved for an order to enter judgment on the section 998 offer, arguing that the language of the offer meant only that the entire action would be settled between him and Remington, and not between him and individual defendants Johnson or Cisneros. Peterson asserted (1) he unconditionally accepted the offer, which was not required to contain the words "entry of judgment"; (2) the offer could not be interpreted as being conditioned upon the dismissal of all defendants as the individual defendants were separately represented and their dismissal would expose Peterson to an enforceable costs award; and (3) the offer was absent consideration to support dismissing the individual defendants. The trial court denied Peterson's motion on grounds the parties had not reached a "meeting of the minds" as to whether Peterson could continue to pursue his case against the individual defendants after his acceptance of the offer.
On Peterson's unopposed request, we take judicial notice of the trial court's ruling on his motion for an order to enter judgment on the section 998 offer, which was erroneously entered in a related case, Halliburton v. Remington College-San Diego Campus, Super. Ct. San Diego County, 2006, No. GIC832737. (Evid. Code, §§ 452, 459.)
B. The Court Properly Denied Peterson's Motion Because Peterson Did Not Absolutely Accept the Section 998 Offer as Written and the Offer Expired On Its Terms
Peterson contends the trial court erred in denying his motion for judgment on Remington's section 998 offer to compromise because his acceptance of the offer was unqualified without additional terms or conditions as the offer was written. The contention is without merit.
We address the enforceability of a section 998 offer on undisputed facts as a question of law. (Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 143.) Ascertaining the terms of such an offer is likewise a question of law if the interpretation does not turn on the credibility of extrinsic evidence. (Fassberg Constr. Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 765; see also Elite Show Services, Inc. v. Staffpro, Inc. (2004) 119 Cal.App.4th 263, 268.) The normal rules of contract law apply to section 998 offers and acceptance, unless such rules conflict with the policies embodied in section 998. (T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 280; Bias v. Wright (2002) 103 Cal.App.4th 811, 817.) Under these principles, " '[a]n acceptance must be absolute and unqualified, or must include in itself an acceptance of that character which the proposer can separate from the rest, and which will conclude the person accepting. A qualified acceptance is a new proposal.' " (Bias v. Wright, at p. 817, quoting Civil Code section 1585; see also Berg v. Darden (2004) 120 Cal.App.4th 721, 731.)
Here, Remington's offer required Peterson to provide in exchange for Remington's payment a "properly executed request for dismissal with prejudice of said action in its entirety as to all parties" as well as an executed release of all claims as to Remington. Yet, Peterson responded by recharacterizing the offer as allowing judgment to be entered against Remington, a term that was not included in Remington's original offer. Our conclusion necessarily rejects Peterson's argument that he had the right to accept Remington's offer as a judgment rather than a settlement. He maintains that under section 998's terms and cases such as Berg v. Darden, supra, 120 Cal.App.4th 721 and American Airlines v. Sheppard (2002) 96 Cal.App.4th 1017, the court was required to enter judgment on his acceptance of the offer; that Remington could not "deprive [him] from accepting the offer . . . by insisting that the offer only contemplated a settlement/release and dismissal[.]" We disagree.
Section 998 provides that, up until 10 days before trial, "any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time." (§ 998, subd. (b).) Numerous cases, including those cited by Peterson, have held that even though section 998 refers to entry of a judgment or award, "an offer that provides for the plaintiff's dismissal of the action with prejudice is a valid form of offer within section 998." (Hartline v. Kaiser Foundation Hospital (2005) 132 Cal.App.4th 458, 470; see also On-Line Power, Inc. v. Mazur (2007) 149 Cal.App.4th 1079, 1084-1085; Berg v. Darden, supra, 120 Cal.App.4th at p. 729-730; American Airlines v. Sheppard, supra, 96 Cal.App.4th at p. 1055; Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899, 905-906 [court of appeal rejected plaintiff's argument that bank's section 998 offer to compromise did not qualify as a valid section 998 offer because it required plaintiff to file a request for dismissal with prejudice in favor of the bank; court held "the word 'judgment' in section 998 indicates that the statute contemplates that an offer to compromise which is accepted will result in the final disposition of the underlying lawsuit" and "the statute does not indicate any intent to limit the terms of the compromise settlement or the type of final disposition"].) This is because a dismissal with prejudice in an action is, for section 998 purposes, legally tantamount to a judgment in the action in that it fully and finally disposes of the action. (On-Line Power, supra, 149 Cal.App.4th at p. 1085.)
We decline to interpret the above referenced cases as equating a dismissal without prejudice to entry of judgment for purposes of permitting a section 998 offeree to accept either in a situation where the offer unambiguously and validly designates one type of final disposition. Treating Remington's section 998 offer like any contract under standard rules of contract interpretation requires us to conclude that Peterson had not absolutely agreed to the offer's clear and explicit terms because he referenced a different disposition. Our role is to enforce the offer as written, not to rewrite it by inserting new terms. (E.g., Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264.) By its terms, the offer was withdrawn on October 7, 2005, without any additional unqualified or absolute acceptance by Peterson. Because we independently review the result of the trial court's determination on questions of law, we are not bound by its stated reasons; we review the court's ruling, not its rationale. (Camp v. Jeffer, Mangels, Butler & Marmaro (1995) 35 Cal.App.4th 620, 629.) On this basis, the court did not err in denying Peterson's motion to enter judgment on the offer.
II. Summary Judgment/Adjudication as to Remington
A. Standard of Review
A defendant moving for summary judgment must show either (1) one or more elements of the plaintiff's cause of action cannot be established or (2) there is a complete defense to that cause of action. (§ 437c, subds. (o), (p)(2); Aguilar, supra, 25 Cal.4th at pp. 850-851; Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334 (Guz).) When the motion is based on the assertion of an affirmative defense, the defendant has the initial burden to demonstrate that undisputed facts support each element of the affirmative defense. (Anderson v. Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 289.)
"The defendant must demonstrate that under no hypothesis is there a material factual issue requiring trial. [Citation.] If the defendant does not meet this burden, the motion must be denied. Only if the defendant meets this burden does 'the burden shift [ ] to plaintiff to show an issue of fact concerning at least one element of the defense.' " (Id. at pp. 289-290.)
The summary judgment procedure determines whether there is evidence requiring the fact-weighing procedure of a trial. (E.g. Guz, supra, 24 Cal.4th at pp. 334, 335, fn 7 ["[A]s to each count of [the] complaint, the issue on appellate review is simply whether, and to what extent, the evidence submitted for and against the motion for summary judgment discloses issues warranting a trial"].) Thus, " 'the trial court in ruling on a motion for summary judgment is merely to determine whether such issues of fact exist, and not to decide the merits of the issues themselves.' [Citation.] The trial judge determines whether triable issues of fact exist by reviewing the affidavits and evidence before him or her and the reasonable inferences which may be drawn from those facts." (Morgan v. Fuji Country USA, Inc. (1995) 34 Cal.App.4th 127, 131.) A material issue of fact may not be resolved based on inferences if contradicted by other inferences or evidence. (Aguilar, supra, 25 Cal.4th at p. 856.)
On appeal, we independently review the parties' supporting and opposing papers and apply the same standard as the trial court to determine whether there exists a triable issue of material fact. (Guz, supra, 24 Cal.4th at p. 334; Southern Cal. Rapid Transit Dist. v. Superior Court (1994) 30 Cal.App.4th 713, 723.) We liberally construe the evidence in support of Peterson as the opposing party (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142), and assess whether the evidence would, if credited, permit the trier of fact to find in his favor under the applicable legal standards. (Cf. Aguilar, supra, 25 Cal.4th at p. 850.) We do not weigh the evidence and inferences, but merely determine whether a reasonable trier of fact could find in Peterson's favor, and we must deny the motion when there is some evidence that, if believed, would support judgment in his favor. (Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 139.)
B. Cause of Action for Tortious Discharge in Violation of Public Policy
1. Legal Principles
To make out a Tameny claim, a plaintiff must show that he was fired in retaliation for refusing his employer's requests to engage in illegal conduct or for reporting improper conduct that is tethered to the violation of a specific statutory or constitutional provision that expresses a fundamental public policy. (Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 79-80, 83 (Green) [plaintiff objected to supervisory and management personnel and to the company president, but not governmental authorities, about shipping defective airplane parts in violation of federal safety regulations]; Tameny, supra, 27 Cal.3d at pp. 172-173; Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 630, 642-643 [plaintiff complained about and refused to implement fraudulent billing practices that violated various Civil Code sections and Penal Code section 484]; Jacobs v. Universal Development Corp. (1997) 53 Cal.App.4th 692, 701-702; Holmes v. General Dynamics Corp. (1993) 17 Cal.App.4th 1418, 1426; Blom v. N.G.K. Spark Plugs (U.S.A.), Inc. (1992) 3 Cal.App.4th 382, 388-389.) "To support such a cause of action, the policy in question must satisfy four requirements: 'First, the policy must be supported by either constitutional or statutory provisions. Second, the policy must be "public" in the sense that it "inures to the benefit of the public" rather than serving merely the interests of the individual. Third, the policy must have been articulated at the time of the discharge. Fourth, the policy must be "fundamental" and "substantial." ' " (Ross v. RagingWire Telecommunications, Inc. (2008) 42 Cal.4th 920, 932, citing Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889-890; see also Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1256; Carter v. Escondido Union High School District (2007) 148 Cal.App.4th 922, 929.) "Tort claims for wrongful discharge typically arise when an employer retaliates against an employee for '(1) refusing to violate a statute . . . [,] (2) performing a statutory obligation . . . [,] (3) exercising a statutory right or privilege . . . [, or] (4) reporting an alleged violation of a statute of public importance.' " (Turner, supra, 7 Cal.4th at p. 1256, emphasis added; see also Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1090-1091, overruled in part on other grounds by Green, 19 Cal.4th at p. 80, fn. 6; Stevenson, supra, 16 Cal.4th at p. 889.)
This court recently explained: "Limiting tortious discharge claims to those supported by constitutional or statutory provisions 'best serves the Legislature's goal to give law-abiding employers broad discretion in making managerial decisions.' [Citation.] It also ensures 'employers have adequate notice of the conduct that will subject them to tort liability to the employees they discharge.' [Citation.] A statute's exclusion of certain employers from its requirements precludes a finding that a fundamental policy supported by that statute would extend to the excluded employers. [Citation.] To make such a finding would unreasonably require employers to realize they must comply with a law from which they are exempted or suffer the possibility of tort liability." (Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 79-80; see also Carter v. Escondido Union High School District, supra, 148 Cal.App.4th at p. 929.)
2. Contentions
Peterson contends he identified a proper statutory basis for his wrongful termination cause of action by referring to both the Reform Act and Waters Act in his opposition to Remington's summary judgment motion, as well as in supplemental form interrogatory responses served after Remington filed its motion. He argues the Waters Act applies to institutions involving diploma, i.e., non-degree, programs, which Remington did at the time of his employment. Peterson points to provisions of the Reform Act that at that time prohibited institutions from directing representatives to perform unlawful acts or refrain from complaining to the council or other governmental agency, and also prohibited untrue or misleading "statements, omissions or intimations," and false, deceptive, misleading or unfair acts by institutions or institution representatives in various contexts including in connection with recruitment and changes in test scores. (Former Ed. Code, § 94832.) Peterson argues the evidence shows he complained to Cisneros and Johnson in October 2004, telling them he did not want to participate any further in altering test scores or helping students cheat on their entrance exams, conduct prohibited by both the Reform Act and the Waters Act.
Former Education Code section 94832, part of the Reform Act in effect at the time of Peterson's employment, stated no institution or institution representative shall "make or cause to be made any statement that is in any manner untrue or misleading, either by actual statement, omission or intimation" (former Ed. Code, § 94832, subd. (a)); "engage in any false, deceptive, or misleading, or unfair act in connection with any matter, including the institution's advertising and promotion, the recruitment of students for enrollment in the institution, the offer or sale of a program of instruction, course length, course credits, the withholding of equipment, educational materials, or loan or grant funds from a student, training and instruction, the collection of payments, or job placement" (former Ed. Code, § 94832, subd. (b)); "in any manner make any untrue or misleading change in, or untrue or misleading statement related to, any test score, grade, record of grades, attendance record, record indicating student completion or enrollment, [and] financial information" (former Ed. Code, § 94832, subd. (h)) or "shall direct a representative to perform any unlawful act, to refrain from complaining or reporting unlawful conduct to the council or another government agency, or to engage in any unfair act to persuade a student not to complain to the council or another government agency." (Former Ed. Code, § 94832, subd. (l).)
Remington responds with several arguments. First, it maintains Peterson had not identified a specific public policy violated by his termination in his first cause of action for wrongful termination (as opposed to in his fourth UCL cause of action); that he never identified which precise sections of the Education Code he was purporting to rely upon. It argues Peterson's complaint serves as the " 'outer measure of materiality' " in a summary judgment motion, and absent an amendment, his present reliance on those statutes is immaterial. Second, Remington argues the one public policy identified in Peterson's complaint arising from Labor Code section 1102.5 has no application because it is limited to circumstances where an employee makes a report to public agencies, which Peterson assertedly did not do. Third, Remington argues Peterson cannot establish that the Reform Act and Waters Act apply. Finally, Remington argues the undisputed facts show Peterson's termination was not wrongful; this claim is premised on an assertion that Peterson's deposition testimony contradicts his declaration and shows he was terminated for his admitted misconduct in changing a test score.
Notably, Remington does not argue on appeal (nor did it argue in its reply briefing before the trial court) that the then effective provisions of the Waters Act or Reform Act do not contain expressions of policy inuring to the benefit of the public at large, or that the public policies expressed in those acts are not fundamental or substantial. Remington did not challenge Peterson's argument that the Waters Act and Reform Act both expressed legislative policy to protect students and taxpayers from fraudulent business acts and practices engaged in by such institutions. (Ed. Code, §§ 94705, 94850.) We observe that both the Waters Act and Reform Act made it a crime to make or cause to be made untrue or misleading changes in test scores or records of grades. (Former Ed. Code, §§ 94834, subd. (a) [Reform Act], 94877, subd. (b), 94881, subds. (b), (e) [Waters Act].) The prospect of criminal sanctions to punish the violation of a policy has been a significant factor in the determination that a policy is substantial and fundamental (Sullivan v. Delta Air Lines, Inc. (1997) 58 Cal.App.4th 938, 945; see Carter v. Escondido Union High School District, supra, 148 Cal.App.4th at pp. 930-931 [recognizing principle].) Accordingly, for purposes of our summary judgment analysis, if we conclude those statutes applied to Remington at the time of Peterson's employment, we assume the policies expressed in them inured to the public's benefit, and were sufficiently fundamental and substantial to support a Tameny claim.
Former Education Code section 94834 of the Reform Act provided: "Any person or business entity, regardless of the form of organization that willfully violates . . . [Education Code s]ection 94832 is guilty of a crime and shall be subject to separate punishment for each violation either by imprisonment in a county jail not to exceed one year, by a fine not to exceed ten thousand dollars ($10,000), or by both that imprisonment and fine; or by imprisonment in the state prison, by a fine not to exceed fifty thousand dollars ($50,000), or by both that imprisonment and fine." Former Education Code section 94877, subdivision (b) provided: "Notwithstanding any provision in an agreement, a student may bring an action for a violation of this article or [Education Code s]ection 94832 [f]or an institution's failure to perform its legal obligations and upon prevailing shall be entitled to the recovery of damages, equitable relief, any other relief authorized by this article, and reasonable attorney's fees and costs." Former Education Code section 94881, subdivision (b) provided: "Any person who, in any manner, makes or causes to be made any untrue or misleading statement in connection with offering or providing a course of instruction, or who makes or causes to be made any untrue or misleading change in any document or record and who knows or, by the exercise of reasonable care, should know that the statement or change is untrue or misleading is guilty of a crime, punishable as provided in subdivision (e)." The section defined "[d]ocument or record" as "any tests score, grade, record of grades, attendance record, record indicating student course completion or employment, financial information including any financial report required to be filed pursuant to [Education Code s]ections 94861 and 94862, information or records relating to the student's eligibility for financial assistance or attendance at the institution, or any other record or document required by this chapter or this council." (Former Ed. Code, § 94881, subd. (a)(1).) The statute defined a "person" as a natural person and any business entity regardless of the form of organization. (Former Ed. Code, § 94881, subd. (a)(2).)
3. Analysis
In his complaint, Peterson only identified "Whistle Blowing" under Labor Code section 1102.5 as the basis for his wrongful termination cause of action, based upon his complaints to Johnson and later reports to Remington management and persons who he alleged were California State accreditation auditors. In supplemental discovery responses, Peterson generally referred to the Reform Act and Waters Act. Finally, in opposition to Remington's motion, Peterson identified specific provisions of the Reform Act and Waters Act, including those proscribing and criminalizing the act of making untrue or misleading statements or changes in test scores (former Ed. Code, §§ 98432, subds. (a), (b), (h), 94850, subds. (a), (b), (c), (d), 94872, 94881, subds. (a), (b)) that he argued provided the asserted public policy basis for his wrongful termination cause of action.
Based on Peterson's opposing summary judgment papers, we reject Remington's contention that it should prevail on its motion because Peterson failed to specifically identify the applicable provisions of the Reform Act or Waters Act in his complaint. To the contrary, Peterson's reference to the specific Education Code sections on which he relied in opposition to Remington's motion was sufficient to meet his burden to provide the specific statutes and regulations on which he based his claim. (See Green, supra, 19 Cal.4th at pp. 83, fn. 7, 84.) The California Supreme Court in Green emphasized that, even though the Court of Appeal had conducted its own independent research and identified specific regulations on which the plaintiff relied on appeal, the appellate court "did find that plaintiff adequately identified the statutes and regulations supporting his public policy claim in his opposition to defendant's summary judgment motion." (Green, at p. 83, fn. 7.) The Green court concluded that the Court of Appeal "properly held that plaintiff had met his burden to provide the specific statutes and regulations on which he based his claim." (Id. at p. 84.)
Despite our conclusion that Peterson adequately raised provisions of the Waters Act and Reform Act in his opposing summary judgment papers as a public policy basis for his wrongful discharge, we nevertheless focus first on Labor Code section 1102.5, which was plainly identified as the public policy basis in Peterson's complaint. Subdivision (c) of that section, added in 2003, provides: "An employer may not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation." In its summary judgment motion, Remington conceded that had Peterson refused to participate in changing a test score and had been fired for that refusal, he might have been able to state a cause of action. Remington argued (unhelpfully omitting any reference to its separate statement or the underlying evidence) that undisputed evidence, including Peterson's deposition, demonstrated Peterson was fired for his own misconduct after he reported changing a test score to Remington management, and that he did not complain to anyone that fired him.
Remington argued Labor Code section 1102.5 does not apply because Peterson cannot show he complained to a governmental agency. We question whether Peterson has in fact raised a triable issue on that point by his unchallenged declaration statement that at the December 1, 2004 meeting he reported misconduct to a person introducing himself as from an accreditation agency, and who Peterson believed to be a state accreditation representative. The fact the record contains defense witness declarations stating there was no state accreditation person present at any of the meetings presents a dispute in the evidence that compels denial of summary judgment. In any event, Remington ignores subdivision (c) of Labor Code section 1102.5, which does not limit its prohibition to reports to governmental entities.
In moving for summary judgment, Remington proffered that its reason for terminating Peterson's employment was that Peterson had admitted changing the student's test score. (Guz, supra, 24 Cal.4th at p. 357.) Peterson's opposing summary judgment burden was to "to rebut [Remington's] facially dispositive showing by pointing to evidence [that] nonetheless raises a rational inference that [retaliatory discharge in violation of public policy] occurred." (Ibid.) We conclude Peterson met that burden. There is no dispute that Peterson changed Lopez's test score. However, there is also unchallenged evidence that Remington management, including Johnson and Cisneros, put a high degree of pressure on recruiters to meet their recruitment quotas, urging them to do " 'whatever it takes' " to enroll students, including essentially falsifying test scores by manipulating test-taking circumstances or encouraging employees to alter the scores. Peterson's declaration, which we must credit absent an express ruling declaring it or material portions of it inadmissible (see footnote 3, ante), states he was directed by Johnson to change Lopez's test score, and that he did so out of fear he would otherwise lose his job as he was on probation at the time. Peterson established without evidentiary dispute that Johnson solicited his help in manipulating test scores by arranging for students to take Remington's standardized entrance exam on a Saturday, giving Peterson the answer key and telling him to give students the answers if necessary. While Johnson did not expressly tell Peterson he would be fired if he did not change the score, Peterson stated Johnson made it clear by "word and deed," including by referring to Peterson's probationary status, that his job would be in jeopardy if he did not cooperate. Peterson averred he thereafter told Johnson he did not like enabling students to take the test because it was cheating, and told both Cisneros and Johnson he did not want to change test scores anymore because it was dishonest. Days after Peterson's December 2004 meeting in which he disclosed to other Remington administrators what he had done with Lopez's test score at Johnson's request, he was fired.
By his declaration, Peterson submitted evidence supporting rational inferences that: (1) he engaged in a protected activity, i.e., he reported to Cisneros and other Remington management reasonably-based suspicions regarding violations of the law after telling Johnson and Cisneros he did not want to participate any further; (2) Remington subjected him to an adverse employment action, i.e., termination; and (3) there is a causal link between his protected activity and Remington's action based on the timing of Peterson's termination. (Lab. Code, § 1102.5, subd. (c); Green, supra, 19 Cal.4th at pp. 80-87; Colarossi v. Coty U.S. Inc. (2002) 97 Cal.App.4th 1142, 1152; Holmes v. General Dynamics Corp., supra, 17 Cal.App.4th at p. 1426; Akers v. County of San Diego (2002) 95 Cal.App.4th 1441, 1453; Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 69-70 [causal link may be established by an inference derived from circumstantial evidence such as the employer's knowledge that the employee engaged in protected activities and the proximity in time between the protected action and allegedly retaliatory employment decision].) The circumstances presented by Peterson's opposing summary judgment evidence are akin to those in Jacobs v. Universal Development Corp., supra, 53 Cal.App.4th 692, in which a marketing director complained to his developer employer about illegal rebates but continued working, forwarding numerous purchase offers including the illegal rebates, but was later fired after he refused to continue the illegal practices. (Id. at pp. 696-697.) This court held the plaintiff's Tameny wrongful termination cause of action survived summary judgment despite his participation in the unlawful practices, because he only "acquiesced in [defendant's] illegal rebate program because he presciently feared being fired if he did not." (Jacobs, at pp. 701, 702-703.) Like in Jacobs, we hold that while Peterson's conduct "cannot be condoned," he presented evidence from which a reasonable jury can infer he "was motivated by the realistic fear of losing his job," and thus his engaging in manipulation of test scores did not involve reprehensible moral conduct. (Id. at pp. 702-703.) The evidence permits a reasonable jury to conclude Peterson succumbed to the high degree of pressure exerted by Johnson and Cisneros and, by virtue of his probationary status acted in a realistic fear of losing his job, finally complaining to both Johnson and other Remington management when he had the opportunity, which resulted in his firing.
Remington's evidentiary objections, which lacked reference to any applicable Evidence Code section, mainly attacked Peterson's declaration as vague, conclusory and without foundation. To uphold such objections would require us to strictly construe Peterson's evidence, which we cannot do on summary judgment. We would in any event conclude many lack merit. For example, Peterson's averments are not inadmissible for failing to specify date, place and time for all recruitment meetings and statements made there. He averred he was employed as a Remington recruiter during the relevant time period and that his supervisors were Cisneros and Johnson, facts from which a trier of fact could reasonably infer Peterson attended the recruitment meetings and had personal knowledge of meeting discussions. (Evid. Code, § 702, subd. (a) [lay witness must have personal knowledge of matters to which he or she testifies].) In our view, the kind of weaknesses in Peterson's declaration raised by Remington go to the weight of Peterson's evidence, a matter not within our purview in reviewing the propriety of summary judgment. This is not a case where Peterson rested his case " 'merely upon conclusory allegations, improbable inferences, and unsupported speculation,' " which would warrant summary judgment. (Nelson v. United Technologies (1999) 74 Cal.App.4th 597, 614; Horn v. Cushman & Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 807 [issue of fact can only be created by a conflict of evidence not speculation or conjecture].)
Further, we disagree with Remington's assertion that Peterson's summary judgment declaration was contradicted in material respects by his deposition testimony. It is generally true that a party may not defeat summary judgment by means of declarations or affidavits that contradict that party's "clear and unequivocal" admissions in sworn discovery responses. (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22.) However, as D'Amico suggests, summary judgment should not be granted based on "tacit admissions or fragmentary and equivocal concessions [that] are contradicted by other credible evidence." (Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, 482.) Remington's attempt to discredit Peterson's summary judgment declaration is based on such tacit, fragmentary and equivocal admissions, and on statements within Peterson's deposition that are contradicted by other portions of Peterson's deposition. For example, with respect to the December 1, 2004 meeting, Remington argues Peterson's declaration is contradicted by his deposition testimony in which he stated: "In the meeting that I had with Mr. Camp it was brought up, the . . . Lopez [test score]. That's what we talked about. There was no confession of sin." This fragment of testimony (which is difficult to understand without any context) does not directly contradict Peterson's declaration in which he avers the December 1, 2004 meeting was his "chance to make my complaint and tell corporate management what was really going on at [Remington]" or his statement that at that meeting he told Remington management about overhearing Johnson tell or suggest to other staff that they should falsify test score results so that the student would pass. The fragments of Peterson's deposition submitted by Remington reveal that earlier in the deposition, Peterson had explained that one of the meetings where he talked about Lopez, he did not talk about the other students whose tests he personally oversaw because he was instructed not to do so by Johnson.
Remington also points to the following portion of Peterson's deposition when he was asked whether Johnson told him he would be fired or terminated if he changed a test score: "[Peterson]: [Johnson] said if you get – if you get – he said that if you get in trouble or if you get presented, you won't hear anything from me. You won't get fired. You won't get – if you hear about this, you won't get in trouble from me, you know what I'm saying, or I won't – I won't – I won't – you won't get any problems from me. So I was assuming that if I didn't – if I didn't do that, yes, I would get fired. . . . [¶] . . . [¶] [Remington counsel]: But my question is, did he ever tell you if you don't change it, I'm going to fire you or someone's going to fire you? [¶] [Peterson]: Okay. If I didn't change it – he didn't say that to me directly, but that's not how it was around there, you know what I'm saying. Like – [¶] [Remington counsel]: No. [¶] [Peterson]: You don't understand what I'm saying. [¶] [Remington counsel]: No. I want you to answer my question. Did he tell you that if you don't change a test score, you would be terminated? [¶] [Peterson]: He didn't tell me that directly." Peterson's testimony was consistent with that of other witnesses, including Shdeed, who testified in her deposition that Johnson never expressly told her to change a test score, though she understood that was what he was encouraging her to do.
In its material respects, Peterson's deposition does not clearly and unequivocally contradict his statements in his opposing summary judgment declaration. (See D'Amico, supra, 11 Cal.3d at p. 22.) During the first session of his deposition, Peterson was asked about a December 8, 2004 meeting he had with Robbie Camp, who he understood to be one of Remington's attorneys, and another person, Peter Leighton, in which Peterson advised them he was involved in the test score changing situation:
"[Remington counsel]: And what was changed was the summary sheet in the file, not the actual score, correct, on the test?
"[Peterson]: Right.
"[Remington counsel]: Because there is an actual test itself, and then the results are put on a summary sheet, true?
"[Peterson]: Yes.
"[Remington counsel]: And what you did was basically put a 1 in front of a 9 to bring the score to a 19, correct?
"[Peterson]: Right. I was directed, and this is – this was in the interview, and it was – hopefully it was in the notes – they took notes, you know, like I told them, but, that I was under the direction of Lennor Johnson, you know, I did not act alone in that.
"[Remington counsel]: Well, on December 8th, 2004, you did not tell Robbie Camp or Peter Leighton that you were directed to change a score, true?
"[Peterson]: False.
"[Remington counsel]: Okay.
"[Peterson]: Oh wait. That I was not directed – not directed – that I acted alone?
"[Remington counsel]: Yes.
"[Peterson]: That's not – that's not true.
[¶] . . . [¶]
"[Remington counsel]: On December 8th, 2004, is it true, in the presence of Bob Price, Peter Leighton, and Robbie Camp, that, with regard to the changing of the . . . Lopez score, you said to them that it was bad decision, and you take one hundred percent responsibility for changing the test score?
"[Peterson]: That's not true. I told them – I told them that I came back and I approached Jose Cisneros and told him, "I'm sorry for doing that, but I did not act alone in changing that test score. Lennor Johnson directed me to do that, know that that was – knew that those things were going on, and he signed off on the – he signed off on the question or the – the – the acceptance interview. He knew that I changed that test score." Peterson flatly denied telling the meeting attendants that he was not asked to change the score but did so and then told Johnson afterwards, or that he told Johnson about changing the test score only because his conscience bothered him.
Peterson testified that Cisneros was the first person he told about changing the test score: "[Remington counsel]: . . . [W]ho was the first person that you told you changed the test score?
"[Peterson]: Jose Cisneros.
"[Remington counsel]: How long after you changed the test score?
"[Peterson]: No. After he approached me.
"[Remington counsel]: Okay.
"[Peterson]: The first person – [L]ennor Johnson was present in the room when I did change the test score. He was there; he saw me do it. So the second person was Jose Cisneros.
"[Remington counsel]: Did you tell Lennor Johnson you were changing a test score?
"[Peterson]: He directed me to do it.
"[Remington counsel]: How long after that day did Mr. Cisneros approach you?
"[Peterson]: I would say a week after.
"[Remington counsel]: And was that Cisneros alone?
"[Peterson]: No. Jose – Jose Cisneros and Lennor Johnson.
"[Remington counsel]: Did you have a meeting?
"[Peterson]: They approached me.
"[Remington counsel]: What was discussed?
"[Peterson]: That I took – that I changed the test score.
"[Remington counsel]: Did you tell Cisneros that Johnson said to change it?
"[Peterson]: No. I was – Johnson stayed quiet and didn't say anything. And I was under the assumption that Jose Cisneros knew that Johnson told me to do that. [¶] Because Johnson did not – did not – did not – did not discipline me or say anything. I thought we were in trouble together.
[¶] . . . [¶]
"[Remington counsel]: . . . [O]n December 8th of 2004, do you recall explaining to Mr. Price and the others, in the meeting in this conference room that we're talking about, that you changed a test score on one day, and then on the next day, you told Lennor Johnson that you changed the test score and, in the following week, Mr. Cisneros and Mr. Johnson met with you about changing that score?
"[Peterson]: Mr. Johnson knew that I changed that test score.
"[Remington counsel]: Well, I just want you to answer yes or no. Do you remember saying that on December 8th, 2004, what I just said?
"[Peterson]: No, I don't remember it. I don't remember it like that.
"[Remington counsel]: . . . [D]o you remember telling Mr. Price, Mr. Camp, and Mr. Leighton, on December 8th, 2004, that the reason you came forward to tell Lennor Johnson about changing the test score is because you had been taking ethics classes, and it just wasn't you to do this type of thing?
"[Peterson]: That I told Johnson that? Do I remember saying that? No, no, not like that.
"[Remington counsel]: Do you remember telling anyone in this room on December 8th, 2004, that you wanted to come forward and talk about changing your test score – before that day of December 8th, 2004, because it just wasn't you?
"[Peterson]: I told them that I didn't want – I didn't want to do that anymore. Yeah. Yeah. Absolutely, yeah we talked about that. That's why I was in here telling them that. That's why I came up to Jose Cisneros, you know, but, like I said in all those – in all those instances, whether I was here or whether I was with Jose, every time I told them that, even in front of Pedro, even in front of the directors, I never – I never strayed away from that. I always said that Lennor – I was directed to do these things. [¶] I told Lennor that, you know, that I didn't want to do that any more. [¶] He said, 'Don't worry about it. Marcie and Jose have been padding numbers.' [¶] 'What does padding numbers mean?' [¶] He said, "Marcie and Jose have been padding numbers in regards to retention, so you'll be fine.' [¶] Then I go to Jose. I say, 'Hey, Lennor has been telling me to do these things.' [¶] Then I went to Pedro and said the same exact thing. I've never strayed away from that." (Emphasis added.)
Later, counsel asked Peterson if he ever heard Johnson tell anyone to change a test score. Peterson initially said no, and then immediately clarified his answer to say he was there when Johnson asked another employee, Javier, to give a female student a few extra points on her test. When asked if he had observed other interactions between Johnson and Javier, Peterson explained that Javier would also give the students tutoring sessions about the contents of the test, which was taken untimed. When asked how many different students were either tutored or given the test untimed, Peterson responded, "It was everybody in recruitment, so I don't know. It could have been, I would say, 50 to a hundred students at the same time that I was working there." Peterson testified that while he had no research to prove it was wrong, he believed Johnson was doing something he shouldn't be doing in allowing students to take an untimed test; that it was cheating and "a lot of bending rules there."
Remington maintains in the face of this evidence that neither the Reform Act or the Waters Act in effect at the time of Peterson's employment apply to provide a basis for Peterson's claim of public policy violation. It contends (1) the Reform Act contains no requirement for entrance examinations and that "any misrepresentation about a voluntary admission test which is not required by [the Reform Act] is immaterial"; and (2) the Reform Act (former Ed. Code, § 94790) exempts application of the Waters Act to " 'educational services' that confer degrees" from its provisions. On this latter point, Remington argues Peterson needed to establish "that the students he helped cheat and whose test scores he changed were enrolled in certificate/diploma programs" but cannot because, as Remington's master registrar confirmed in a declaration, none of those named students were enrolled in such a program. Neither these contentions nor Remington's evidence established that Remington as an institution (as opposed to particular students) was exempt from either Reform Act or Waters Act requirements in effect during Peterson's period of employment. Indeed, in opposition to summary judgment, Peterson presented a declaration from Bill Moody, Remington Administrative Services, Inc.'s director of compliance and ethics, in which Moody averred that in June 2004, Remington began enrolling students for non-degree (diploma) programs. And the Reform Act did not limit its proscriptions to any type or nature of test; it included within its identification of documents "any test score, grade, [or] record of grades . . . ." (Former Ed. Code, §§ 94832, subd. (h)(1), italics added, 94834.) The Reform Act provisions in effect at the time of Peterson's employment do not support Remington's argument that the act applied only to statutorily required tests.
But such particularized proof of a statutory violation is unnecessary in any event. An employee need not prove an actual violation of law to support a Tameny claim; rather, the employee's assertion that his or her employer violated the law must be reasonably based. " 'An agreement prohibiting an employee from informing anyone in the employer's organization about reasonably based suspicions of ongoing criminal conduct . . . would be a disservice . . . to the interests of the public and would therefore present serious public policy concerns not present in Foley.'" (Green, supra, 19 Cal.4th at p. 87, citing Collier v. Superior Court (1991) 228 Cal.App.3d 1117, 1125.) Nor must a statutory provision specifically prohibit the employer's precise act; instead it " 'must sufficiently describe the type of prohibited conduct to enable an employer to know the fundamental public policies that are expressed in that law.' " (Grinzi v. San Diego Hospice Corp., supra, 120 Cal.App.4th at pp. 80-81.) We conclude the specified provisions of the Reform Act and Waters Act meet this standard. And here, it is sufficient that Peterson held objectively reasonable suspicions that the ongoing manipulation of test scores encouraged by Remington management was unlawful under either the Reform Act or Waters Act.
C. Defamation Cause of Action
Peterson contends summary judgment was improperly granted in Remington's favor on his defamation cause of action given disputed material facts as to (1) the question of malice in order to defeat the Civil Code section 47, subdivision (c) common interest privilege; (2) truth as a defense; and (3) Remington's vicarious liability for Johnson's or Cisneros's actions.
In support of its motion, Remington argued the defamatory statements alleged to have been made by Johnson and Cisneros were "substantially true" and were also subject to the common interest privilege because Peterson alleged they were made to " 'other staff . . . certain officers and directors . . . and certain state auditors. . . .' " Remington's separate statement as to the defamation cause of action incorporated the other assertedly undisputed facts pertaining to the wrongful termination cause of action, pointed to the complaint's allegations, and then recited only one other alleged disputed fact: that "Peterson was never told that he would be fired if he did not change any test score."
1. Civil Code section 47, Subdivision (c) Privilege
Civil Code section 47, subdivision (c) provides a qualified privilege for "a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information."
The common interest privilege involves a two-step analysis. First, the defendant must establish that the allegedly defamatory communication was made upon a privileged occasion; then the plaintiff may defeat the privilege with proof that the statement was made with malice. (Lundquist v. Reusser (1994) 7 Cal.4th 1193, 1208; Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1369.) As to the first prong, interested persons "have been defined as a communicator and a recipient with a common interest, although to be protected the communication must be one 'reasonably calculated to further that interest.' " (Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180 Cal.App.3d 985, 995.) Peterson does not argue he raised issues of fact showing Johnson's and Cisneros's alleged defamatory statements were not made on privileged occasions, and we conclude the undisputed evidence that their statements were assertedly made to other Remington employees (i.e., "the entire staff at the San Diego Campus") established the privilege's applicability. (Accord, Deaile v. General Telephone Co. of California (1974) 40 Cal.App.3d 841, 846; Cruey v. Gannett Co. (1998) 64 Cal.App.4th 356, 369; see also Noel v. River Hills Wilsons, Inc., at p. 1369; Bierbower v. FHP, Inc. (1999) 70 Cal.App.4th 1, 3.)
Rather, Peterson contends he presented evidence raising a triable issue as to whether Johnson and Cisneros acted with malice in making the alleged statements. In part, he maintains his evidence shows that Johnson and Cisneros falsely accused him of acting alone in an effort to shift the blame on him and away from their involvement in the test score-changing practices. " 'The malice necessary to defeat a qualified privilege is 'actual malice' which is established by a showing that the publication was motivated by hatred or ill will towards the plaintiff or by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff's rights . . . .' " (Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 413, quoting Roemer v. Retail Credit Company (1975) 44 Cal.App.3d 926, 936.) " 'Inherent in the concept of reckless disregard for truth is the notion that it is the speaker's belief regarding the accuracy of his [or her] statements, rather than the truth of the underlying statements themselves, that is relevant to the malice determination.' " (Noel v. River Hills Wilsons, Inc., supra, 113 Cal.App.4th at p. 1371.)
In his supporting declaration, Peterson averred that after meeting with Remington management about the Halliburton litigation but before his termination, "[Cisneros and Johnson] acted very negative toward" him and "seemed upset" at him. He averred: "It appeared to me that they were angry at me, because I had disclosed to corporate management the changing test score incident and other improper practices at the college, after I told Cisneros and Johnson that I would keep quiet about it."
Remington's sole argument as to whether Peterson presented evidence of malice is simply that he did not, and that Sanborn v. Chronicle Publishing Co., supra, 18 Cal.3d 406 is distinguishable because the court found substantial evidence of hatred and ill will by the alleged publishers of the defamatory statements. Remington otherwise provides no meaningful argument explaining how it demonstrated it was entitled to judgment as a matter of law for the absence of any evidence of malice. The record on appeal contains direct and circumstantial evidence that Johnson and Cisneros were unduly pressuring recruiters and test administrators to manipulate test scores in favor of enrolling students who would not otherwise be qualified to attend Remington, tending to support Peterson's version of events, and other evidence corroborates Peterson's declaration. Accepting Peterson's evidence and construing it liberally, we conclude under the circumstances that his declaration creates a question of fact pertaining to whether, in making their alleged statements, Johnson and Cisneros bore Peterson ill will as a result of his complaints to other Remington administrators thereby defeating the Civil Code section 47, subdivision (c) privilege. Stated another way, a reasonable jury could conclude malice was a motivating factor in the alleged communications.
Moreover, we conclude Peterson's evidence showing Johnson directed him to change Lopez's test score and that Cisneros knew about the situation would allow a jury to reasonably infer that Johnson and Cisneros's statement that Peterson "acted alone" in changing the test score was an effort to deflect blame from themselves to Peterson. Such evidence raises a factual issue as to whether Johnson and Cisneros lacked a reasonable or good faith belief in the truth of their alleged statements to other Remington employees, and thus acted in reckless disregard of Peterson's rights. (Accord, Sanborn v. Chronicle Pub. Co., supra, 18 Cal.3d at pp. 410, 414 [county clerk told press he had been "conned" by the plaintiff to improperly release funds when in fact he had decided the claim on the funds was valid and paid the money to plaintiff; court held that although differing inferences could be drawn, substantial evidence supported a finding of malice because a jury could find that the clerk wished to transfer the blame of the loss of funds to the plaintiff to exculpate himself in the eyes of the press and general public]; Cruey v. Gannett Co., supra, 64 Cal.App.4th at pp. 366-370 [triable issue of fact raised as to whether defendant had self-protective motives in making statements to human resources that the plaintiff had harassed her; defendant admitted she had responded angrily when confronted by negative job evaluations and filed her complaint with employer on the day after the evaluations].)
2. Truth
" 'In all cases of alleged defamation . . ., the truth of the offensive statements or communication is a complete defense against civil liability, regardless of bad faith or malicious purpose.' [Citation.] '[T]he defendant need not justify the literal truth of every word of the allegedly defamatory matter. It is sufficient if the substance of the charge is proven true, irrespective of slight inaccuracy in the details, 'so long as the imputation is substantially true so as to justify the 'gist or sting' of the remark." ' " (Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1132-1133.)
Remington argues that because Peterson admitting changing Lopez's test score, it is entitled to summary judgment on the ground that Johnson's and Cisneros's statements were substantially true; that the "essence of the supposedly injurious statement is the fact that [Peterson] changed the test score" and the fact he was directed to do so "is a subtle distinction without a difference."
We disagree. First, it is the pleadings that frame and define the issues presented in summary judgment proceedings. (Residential Capital v. Cal-Western Reconveyance Corp. (2003) 108 Cal.App.4th 807, 829.) In his complaint, Peterson alleged that the defamatory statement was that "[Peterson] acted alone in changing a test score on a student applying for admission." (Emphasis added.) Further, an assessment of the defamatory meaning conveyed by a statement is " 'measured not so much by its effect when subjected to the critical analysis of a mind trained in the law, but by the natural and probable effect upon the mind of the average reader.' " (MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 551.) The alleged defamatory publication is to be construed " ' "not only . . . with reference to the actual words used, but according to the sense and meaning under all the circumstances attending the publication which such language may fairly be presumed to have conveyed to those to whom it was published. So that in such cases the language is uniformly to be regarded with what has been its effect, actual or presumed, and its sense is to be arrived at with the help of the cause and the occasion of its publication. . . . [A] court is to place itself in the situation of the hearer or reader, and determine the sense or meaning of the language of the complaint for libelous publication according to its natural and popular construction." ' " (Id. at pp. 546-547.)
Peterson's evidence puts the statements in context, and raises issues of material fact as to the truth of the harmful "gist" of Johnson's and Cisneros's statements to other Remington personnel, that is, whether Peterson changed Lopez's test score on his own volition, or whether he did so due to pressure or coercion from his supervisors.
3. Vicarious Liability
In moving for summary judgment, Remington conceded that for an action to lie against a corporate defendant for the acts of its employees, the employees must have been acting within the scope of their employment, i.e., performing acts required or incident to their duties or reasonably foreseen by the employer. Remington asserted that Cisneros and Johnson were not so acting; that "[i]t is not their job to broadcast allegedly defamatory statements" and it would not have been foreseeable to Remington that they would conduct themselves in that fashion. Remington argued, "Further, there is no allegation or facts that would support the concept that [Remington] ratified . . . Cisneros and Johnson's conduct. To the contrary, [Remington's] conduct in terminating plaintiff, Cisneros, and Johnson demonstrates there was no ratification whatsoever."
Remington's threshold burden of production on summary judgment required it to "make a prima facie showing of the nonexistence of any triable issue of material fact." (Aguilar, supra, 25 Cal.4th at p. 850.) Stated another way, it could have met its initial summary judgment burden by "present[ing] evidence that would preclude a reasonable trier of fact from finding . . . it was more likely than not . . . the material fact [that Cisneros and Johnson were not acting within the scope of their employment when they made the defamatory statements] was true." (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003.) Or, Remington could "establish . . . an element of the claim cannot be established, by presenting evidence . . . the plaintiff 'does not possess and cannot reasonably obtain, needed evidence.' " (Ibid.)
Remington did not meet this burden. The foregoing arguments were made in its points and authorities without any corresponding citation to its separate statement or the underlying evidence. Having reviewed all of Remington's summary judgment papers, as well as the supporting declarations from Charles Camp and Pedro de Guzman, we have found nothing addressing the question of the scope or nature of Cisneros's or Johnson's respective duties as Remington employees. As a result, Remington did not meet its burden to either negate a finding of vicarious liability or establish that Peterson could not prove either Johnson or Cisneros acted on Remington's behalf within the scope of their job duties when they made the alleged statements to Remington staff.
D. UCL Cause of Action
In moving for summary judgment on Peterson's UCL cause of action, Remington argued the cause of action was fatally defective because (1) Peterson could not establish personal damages from any alleged unfair, unlawful or fraudulent practices (2) the alleged wrongful practices were "insufficient to constitute 'business practices' " as contemplated by the UCL and relevant case law; and (3) Peterson could not prove Remington in fact engaged in the alleged wrongful practices. Remington pointed out that Peterson was claiming Remington had engaged in the practice of defrauding the federal government by submitting phony financial aid requests, misled prospective students about the quality of the school, and had a business practice of requiring its employees to change test scores of students applying for admission or face termination. Remington argued that based on those allegations, Peterson could not demonstrate damages caused by use of any Remington product or service because he was not a consumer or student and had not had any business dealings with Remington. In its summary judgment separate statement, Remington cited to Peterson's complaint's allegations describing the purported unfair, unlawful or fraudulent practices, and asserted as undisputed that Peterson admitted in his deposition he knew of only one changed test score, which was Lopez's score he had changed.
Remington's sole "fact" in its separate statement on this point reads: "Plaintiff has admitted that he knows of no other test scores that have been changed, other than the test score Peterson himself changed. The sole incident of which Peterson is aware involving another employee was a recruiter whose student he claims got in with an insufficient score, and the insufficient score was inadvertently overlooked as opposed to changed."
In opposition, Peterson acknowledged he was required to be a "direct victim" of the alleged unfair business practice but argued that standard was met because he was "coerced into participating in [an unfair and unlawful] scheme to change test scores at [Remington] as a condition of his employment," and lost money, i.e. wages, as a consequence of those practices. He further argued he had standing as a taxpayer, an intended beneficiary of the Waters Act. For the latter proposition, Peterson pointed to legislative findings of the Waters Act, former Education Code section 94850, subdivision (d), indicating that act's intent and purpose was to in part "save millions of dollars of taxpayer's funds from being misused to underwrite the activities of institutions that depart from the standards of fair dealing and the requirements of this article."
In 2004, Proposition 64 restricted standing to assert a UCL cause of action to authorize suits by plaintiffs "who [have] suffered injury in fact and [have] lost money or property as a result of unfair competition." (Bus. & Prof. Code, § 17204; Californians for Disability Rights v. Mervyn's LLC (2006) 39 Cal.4th 223, 228.) The amendment deleted language that had formerly authorized suits by any person "acting for the interests of itself, its members or the general public." (Californians for Disability Rights, at p. 228.)Proposition 64 was unequivocally intended to narrow the category of persons who could sue businesses under the UCL. (Hall v. Time, Inc. (2008) 158 Cal.App.4th 847, 853 (Hall).) It was designed "to prohibit private attorneys from filing lawsuits for unfair competition where they have no client who has been injured in fact" and provided "that only the California Attorney General and local public officials be authorized to file and prosecute actions on behalf of the general public." (Prop. 64, § 1, subds. (e), (f); Californians for Disability Rights, at p. 228; Hall, at pp. 853-854.)
Recently, in Hall, the court of appeal addressed the meaning of the "injury in fact" requirement of the UCL, observing that an injury in fact is " '[a]n actual or imminent invasion of a legally protected interest, in contrast to an invasion that is conjectural or hypothetical.' " (Hall, supra,158 Cal.App.4th at p. 853, citing Black's Law Dict. (8th ed. 2004) p. 801.) Under this standard, we agree that as a matter of law Peterson cannot establish he has standing as a taxpayer to sue under the UCL. Even assuming he (as opposed to the Attorney General) was authorized to bring an action for some generalized loss of tax dollars, his alleged personal loss is unspecified and hypothetical. Furthermore, in his complaint, Peterson alleged only that he suffered lost money "in the form of lost wages," not some unidentified form of tax loss.
We turn to Peterson's allegations that he lost wages by virtue of his being terminated "as a result of" Remington's alleged unlawful or unfair business practice of requiring "plaintiff and other [Remington] employees to violate the law as a condition of their employment." As to this theory, we conclude Remington has not shown it is entitled to judgment as a matter of law on Peterson's UCL cause of action. First, Remington did not present any argument, nor did it attempt to present facts in its separate statement, demonstrating that the alleged practice of requiring Remington employees to manipulate test scores is not a "business practice" within the meaning of the UCL. Courts have consistently interpreted the language of section 17200 broadly: "Its coverage is 'sweeping, embracing " 'anything that can properly be called a business practice and that at the same time is forbidden by law.' " ' " (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180, quoting Rubin v. Green (1993) 4 Cal.4th 1187, 1200 & Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 113.) "For example, where the employer's policy or practice is forbidden by or found to violate the Labor Code, it may also be held to constitute an 'unlawful business practice' . . . ." (Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881, 907.) The UCL's inclusion of unfair or fraudulent business practices permits a UCL claim to be premised on acts and practices not specifically proscribed by any other law. (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.)
If Remington intended to argue that one incidence of a changed test score does not constitute a "practice," i.e., repeated conduct, we conclude, liberally construing and resolving all doubts in favor of Peterson's evidence (Patten v. Grant Joint Union High School Dist. (2005) 134 Cal.App.4th 1378, 1384), Peterson raised a triable issue of fact on this point. In the portions of Peterson's deposition referenced by Remington, Peterson testified that sometime toward the end of October 2004, another Remington employee, Felicia Parker, told him one of her students was admitted into class despite not having obtained a passing score on Remington's entrance exam; that Cisneros, who conducted the acceptance interview of that student, "just overlooked it." Remington's characterization of Parker's statement – that Parker had stated the nonpassing score was " 'inadvertently' " overlooked – is not supported by Peterson's deposition testimony. Rather, one may reasonably infer from Peterson's testimony in which he paraphrased Parker as telling him Cisneros "just overlooked it" meant that Cisneros turned a blind eye toward the student's failing score.
Further, in opposition, Peterson pointed to his deposition testimony in which he stated Johnson had asked Shdeed (also known as Katrina Glover) and a librarian, Javier, to manipulate prospective students' test scores by permitting them to take the test numerous times without complying with time limitations. Specifically, he testified that five or six times over the course of his last year with Remington he overheard Johnson ask Shdeed to have prospective students come in on a Saturday and take the exam untimed for a third or fourth time. Because Remington's summary judgment arguments pertaining to the UCL were limited solely to the question of whether its alleged unlawful practices were repeated, we conclude Peterson's evidence raised a question for a jury to decide on this point. Finally Remington has not shown it is entitled to summary judgment on Peterson's UCL cause of action by its argument that Peterson's deposition testimony contradicts any allegation that Remington engaged in any unlawful business practices. In its moving papers, Remington argued Peterson "admitted [in his deposition] that he himself was never told that he would be fired if he did not change a test score. Rather, . . . Peterson admitted he was concerned about the fact that he had not performed well as a recruiter and that he had failed to meet Remington's quota numbers that existed for all Remington recruiters." But Peterson's evidence demonstrates Johnson encouraged or pressured recruiters to manipulate test scores as a regular practice. It was not necessary for Peterson to show Johnson expressly told him he would be fired if he refused if a reasonable jury can conclude, as one could here, such a threat was implicit in Johnson's words or actions.
III. Summary Judgment as to Johnson and Cisneros
Peterson's sole claim on appeal with respect to Johnson and Cisneros relates to his defamation cause of action. We apply the same de novo standard of review to Johnson and Cisneros's summary judgment motions.
As to those motions, the court ruled, "Peterson admitted he changed a test score. This was the reason he was terminated. Any alleged statements by Johnson or Cisneros that [Peterson] acted alone in changing the grade are not defamatory because the substance of the statements, i.e. that Peterson was terminated for changing a test score is true and therefore not defamatory. Whether it is false that Peterson acted alone or did so at Johnson's urging is not defamatory as it does not injure Peterson's reputation. The injury to his reputation was his admitted improper act."
In moving for summary judgment, Johnson and Cisneros argued Peterson's defamation cause of action failed because it was barred by the defense of truth; and there was no evidence of malice. Cisneros further argued that Peterson could not present admissible evidence that he (Cisneros) ever made a defamatory statement; that Peterson's allegations against him were based on hearsay and speculation. Both Johnson and Cisneros submitted declarations in which they denied ever stating to anyone that Peterson had "acted alone" when he changed the student's test score; that they only had conversations with other Remington employees relating to Peterson's admission that he changed the test score and accused Johnson of ordering him to change it.
Peterson opposed the motions by arguing that his declaration raised a triable issue of material fact as to whether Johnson and Cisneros acted with malice in making their statements that he acted alone, which suggested he was dishonest and "crooked." Peterson also pointed out that changing test scores was a crime under former Education Code section 94881, subdivisions (a)(1)(2) and (b), which Johnson acknowledged in his discovery responses when he asserted the Fifth Amendment privilege against self-incrimination. Based on this evidence, Peterson argued he raised a triable issue of fact as to whether Johnson in fact ordered Peterson to change the test score.
As to Johnson, for the reasons expressed above in part II(C), ante, we conclude Peterson raised triable issues of material fact as to malice and the defense of truth. However, as to Cisneros, we conclude based on Peterson's contradictory deposition testimony that Cisneros is entitled to judgment as a matter of law. Peterson's deposition testimony contradicts the statement in his declaration that Cisneros made statements to other Remington employees that he "acted alone" in changing Lopez's test score. Peterson testified at his deposition that Felicia Parker attended a meeting during which Johnson and Cisneros told the attendees why he had been terminated, but he admitted he did not know whether or not Cisneros told the group he acted alone in changing the test score. Peterson also testified he only assumed Cisneros had made statements to Chris Tilley, another Remington officer or employee, given the timing of Tilley's call. Based on Peterson's contradictory deposition testimony, we conclude summary judgment was properly granted in Cisneros's favor on Peterson's defamation cause of action.
Having applied an independent standard of review to the record in this case, we conclude there are triable issues of material fact that prevent entry of summary judgments in favor of Remington and Johnson. (§ 437c, subds. (c), (p)(2); Aguilar, supra, 25 Cal.4th at pp. 843-857.)
DISPOSITION
The judgment in favor of Jose Cisneros is affirmed. The judgments in favor of Remington College-Denver Campus, Inc. and Lennor Johnson are reversed and the matter is remanded with directions that the trial court vacate its order granting Remington's and Johnson's motions for summary judgment and enter a new order granting summary adjudication of Terrance Peterson's second cause of action and denying summary adjudication as to the remaining wrongful termination, defamation, and UCL causes of action. The parties shall bear their own costs on appeal.
WE CONCUR: AARON, J., IRION, J.