Dorris v. Bank of America

Filed 7/16/07 Dorris v. Bank of America CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

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Plaintiff Louise Dorris appeals from the final judgment entered against her after the last in a series of motions for summary judgment through which defendant Bank of America (Bank) eventually was able to pare her complaint down to nothing. The plaintiff contends the trial court erred in concluding that federal law preempts her claim under state law for age discrimination, and that her claim under federal law for a violation of her right to medical leave is not viable. We shall affirm.

Background

The issues (as the parties frame them) involve the legal significance of primarily undisputed facts. We therefore will not follow the usual paradigm for review of a ruling on a motion for summary judgment (Rio Linda Unified School Dist. v. Superior Court (1997) 52 Cal.App.4th 732, 734-735 (Rio Linda)), as we do not need to detail whether the respective evidentiary showings of the parties satisfied their burdens of production and proof.^[1]

I

The plaintiff started working for the defendant in 1960. In the early 1990s, she began to perceive detrimental changes in her working conditions and incidents of hostility that she believed showed bias against her on the basis of her age. In light of our disposition, the exact nature of the work environment that the plaintiff describes or the extent to which the defendant disputes its truth is immaterial. What is significant to our disposition is the evidence establishing her title and duties at defendant Bank.^[2]

The various sets of bylaws in effect between 1994 and 1998 designated specific officers for the defendant Bank, and also provided for such other officers as the Board may from time to time by resolution create . . . [which shall be] deemed included in these By-laws. Pursuant to this provision, the defendants board of directors issued resolutions in 1995 and 1996 confirming various officer titles and reappointing incumbents as recorded in Bank personnel records.^[3] According to authenticated excerpts of Bank personnel records collected contemporaneously with both of the resolutions (and apparently included in the minutes), the plaintiff held the corporate title of authorized officer and a position title of financial services representative.

The exact extent to which the defendant actually delegated authority to the plaintiff is not clear. Whatever preexisted the pertinent time frame, in March 1992 the Bank revoked any credit authorities delegated to you for consumer loans, small business loans and Bank cards and expressly delegated only a transaction authority to waive a hold on uncollected funds up to $10,000.^[4] The Bank issued a superseding delegation in January 1993. While the terms of this delegation are not entirely clear, we do not need to decipher them, as the plaintiff asserted in her opposition to the motion that a change in her job status shortly afterward (the exact details of which are not important) had the legal effect of revoking it.  However, her opposition also admitted that she nonetheless retained signing authority . . . to accept[] deposits and giv[e] credit thereon for funds in the amount of $10,000, the exercise of which on one occasion in June 1996 had the result of a $9,000 loss to the Bank from either cashing a fraudulent check or authorizing a fraudulent withdrawal (the record being unclear).

In December 1996, a subordinate branch manager responsible for supervising attendance met with the plaintiff to place her on probation for accumulating unexcused absences.^[5] The plaintiff told him she needed to undergo foot surgery and would need to take medical leave; she asked if this would have any impact on her tenure. He told her that it was possible that the Bank might discipline her as a result. Even though the branch manager had already approved the medical leave, the plaintiff postponed her impending January 1997 surgery based on this conversation with the subordinate manager. In February 1997, she provided a note from her doctor asserting that she was suffering from stress. The plaintiff obtained approval from the branch manager on February 3, 1997, to begin medical leave the next day. The subordinate branch manager suggested to her that she should retire rather than risk being fired for excessive absence. Later that month, the plaintiff provided another doctors note to extend her stress leave. The subordinate branch manager repeated his suggestion regarding retirement. As a result, on February 25, 1997, the plaintiff notified her branch manager of her intent to retire as of July 1, 1997, in order to protect her retirement benefits. However, after she exhausted the leave to which she was entitled under the Federal Medical Leave Act (29 U.S.C.  2601 et seq. (FMLA)), the subordinate branch manager told her that her resignation would be effective as of May 30, 1997. The Banks board of directors formally accepted her resignation from her office at its August 1997 meeting, among Other Separations and Position Moves May 12, 1997 - July 24, 1997.

II

The convoluted procedural history of this action started several months later. In February 1998, the plaintiff pursued administrative remedies for age discrimination. She initially contended that she had been forced to retire because of age and unspecified disabilities and medical conditions in May 1997. After she obtained authorization to pursue her remedies at law, the plaintiff filed an amended charge with the agency in March 1998 that also asserted harassment, a denial of accommodation, and a denial of family medical leave.

The plaintiff initiated the present action a year to the day after receiving permission to sue. As clarified in an amended complaint filed a few months later, she alleged that she was a victim of age discrimination taking the form of adverse actions and harassment that resulted in her forced retirement from her employment. She also admixed theories of a breach of implied covenants governing her conditions of employment,^[6] a firing in violation of public policy, and a wrongful denial of employment benefits (including the FMLA). She sought declaratory relief as well as to whether provisions of the defendants long-term disability plan were unlawful. She sorted these various theories among four causes of action without regard for whether they actually involved distinct invasions of primary rights. (Cf. Rio Linda, supra, 52 Cal.App.4th at p. 735, fn. 2; Barrett v. Superior Court (1990) 222 Cal.App.3d 1176, 1182.)

The defendant answered; discerning the presence of a federal question, it removed the matter to federal court. A year later, the plaintiff attempted to file an amended pleading in order to add an explicit cause of action for violating the FMLA. When the federal court denied permission to file the amended pleading, the plaintiff filed a dismissal in which she described her third and fourth causes of action as containing her claims for relief involving federal subject matter jurisdiction. In a July 2000 order, the federal court stated that in light of the plaintiffs election to dismiss her federal claims . . . the above-captioned matter is hereby REMANDED to the Sacramento County Superior Court.

Upon her return to state court, the plaintiff moved for leave to amend her complaint. Inter alia, she sought to state a cause of action for a violation of her rights under the FMLA (asserting that she had already alleged facts supporting this theory). She subsequently withdrew this motion.

In late 2003, the plaintiff prevailed on a motion to set the case specially for trial. She also lodged a renewed motion to file an amended pleading on December 31, 2003, to be heard upon assignment of the matter to a trial department on February 3, 2004. She served this motion on the defendant.

In response, defendant Bank moved to dismiss the action for dilatory prosecution and to continue the February 2004 trial date. It also opposed the motion to amend the pleadings, primarily with respect to the effort to add an FMLA cause of action, but also to the extent it sought to add a theory of a hostile environment of harassment other than the discrete acts alleged in the existing pleading. The court denied the motion to dismiss because the defendant had not opposed the motion to set the matter specially for trial, which involves the same factors.^[7] It continued the trial date to March 2004. The motion for leave to amend the complaint trailed with it.

The defendant had filed a motion for summary judgment on the remaining causes of action in the remanded complaint on substantive grounds. After a continuation of the trial date to June 2004 for lack of a courtroom, the defendant also filed a motion seeking summary judgment on the ground that federal law preempted the plaintiffs remaining state causes of action. The trial court granted the substantive motion for summary judgment without considering the merits of the Banks preemption arguments in the second motion. It found that the plaintiffs lawyer had egregiously failed to comply with the procedural requirements for opposing summary judgment and it therefore would disregard the opposition; it had, however, reviewed the opposition and found that it failed to identify a material triable issue. The court entered judgment for the defendant in June 2004.

The plaintiff moved to vacate the judgment, contending that the defendants motion for summary judgment had not addressed theories lurking in the remanded pleading of a work environment hostile to her age or a violation of the FMLA.^[8] The trial court granted the motion in August 2004, but reaffirmed its earlier ruling on the other theories and invited the defendant to renew its motion seeking summary judgment on preemption grounds. The defendant duly renoticed its preemption motion, and also filed a motion for summary judgment on substantive grounds as to both the state and the FMLA causes of action.^[9] In September 2004, the court granted summary judgment on grounds of preemption as to any cause of action under state law. It denied a subsequent motion by the plaintiff for a new trial or to vacate judgment as untimely and without merit.

The court shortly afterward denied the motion for summary judgment on the substance of any state causes of action as moot, and granted summary adjudication on two of the three theories (retaliation and discrimination) that underlay the remaining FMLA cause of action. Although the plaintiff moved for a new trial or to vacate the ruling, she apparently withdrew the motion just before the hearing.

The plaintiff filed a document in January 2005 in which she struck with prejudice any claims in her complaint premised on a wrongful firing. She then sought leave to amend her complaint to eliminate any reliance on the FMLA.^[10] The trial court denied the motion and noted for the record that the plaintiff agreed that she would not seek again to amend her complaint.

The defendant moved for summary judgment for a final time, asserting that the plaintiff could not establish any cognizable remedy for interference with the exercise of her FMLA rights (her sole remaining theory). The court granted the defendant Banks motion and entered judgment for the defendant.

The trial court denied the plaintiffs motion seeking to reopen its ruling on federal preemption (finding her conduct of continuing to present the same issue to the court by different motions is being done primarily for an improper purpose, such as to harass, or to cause unnecessary delay or needless increase in the cost of litigation, and directing her to cease raising the issue in the trial court or risk a contempt adjudication).^[11] The trial court also denied the plaintiffs motion for new trial or to vacate the judgment, bringing the matter at last to an end at the superior court level in September 2005. The plaintiffs timely appeal followed.

Discussion

I

A

As it has provided since the time of the Civil War without amendment, the National Bank Act of 1864 (see 12 U.S.C.  38 (NBA)) gives a national banking association the power by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties . . . , dismiss such officers . . . at pleasure, and appoint others to fill their places. (12 U.S.C. 24, Fifth, italics added.) By virtue of the authorization to dismiss these officers at pleasure, it is now black letter law more than a century old that this provision preempts all state law causes of action that an officer within its ambit might seek to plead for breach of an employment agreement. (Wells Fargo Bank v. Superior Court (1991) 53 Cal.3d 1082, 1088 (Wells Fargo).) It is not disputed that the NBA applies to defendant Bank.

Wells Fargo established the criteria for determining whether a plaintiff is among the catchall phrase other officers. After discussing the broad construction that the banking industry has accorded officer since the 19th century (53 Cal.3d at pp. 1089-1091), Wells Fargo listed the following attributes: the position must exist pursuant to a resolution of the board of directors and be listed in the bylaws; the board of directors must appoint the officeholder; the officer must have express authority to bind the bank in transactions with borrowers, depositors, customers, or other third parties by executing contracts or other legal instruments on the banks behalf; and this authority, however restricted, involves fundamental banking operations with the potential to affect the publics trust in the bank, because the public would view the officer as the bank itself. (Id. at p. 1091.) As long as these criteria are satisfied, it does not matter that the position is not high-level or does not have bank-wide authority; the use of the term . . . imports no more than appointment by the board and authority to act for the bank in third party transactions. (Id. at p. 1093.) However, as the Wells Fargo board of directors had not itself dismissed the employee, she did not satisfy these criteria and the NBA did not preempt her state causes of action. (Id. at pp. 1086, 1103.)

Peatros v. Bank of America (2000) 22 Cal.4th 147 (Peatros) is one of the few decisions of our Supreme Court that requires nose-counting. The case confronted the interplay of the NBA, federal antidiscrimination statutes, and causes of action under state antidiscrimination law. Noting that the species of federal preemption implicated in analyzing the effect of the NBA is so-called conflict preemption (id. at pp. 157-158, 169-170; accord, Aalgaard v. Merchants Nat. Bank, Inc. (1990) 224 Cal.App.3d 674, 686, 688), a plurality opinion of three justices (per Mosk, J.) ruled that federal antidiscrimination statutes had amended the earlier-enacted NBA by implication and restricted the otherwise untrammeled power of a bank to dismiss officers at pleasure without penalty; as a result, a discrimination cause of action under state law that does not exceed the relief available under federal law may proceed because it does not present a conflict. (Peatros, supra, 22 Cal.4th at pp. 168-169, 172.) However, another plurality of three justices (per Brown, J.) rejected this approach to preemption analysis. Whatever the merit in imputing a Congressional intent to amend the NBA to subject banks to the uniform enforcement of federal law, the Brown opinion concluded that Congress did not thereby intend to subject banks to a patchwork of state laws that have a diversity of procedures even if their substance otherwise conforms to federal law, especially where the exact extent of preemption would need to be the subject of litigation in each jurisdiction. (Id. at pp. 185, 187-188.) Consequently, the Brown opinion found that state law was entirely preempted. (Id. at pp. 185, 189.) The Mosk opinion appeared as the lead opinion only because a concurring opinion (Justice Kennard) provided the deciding vote for the disposition of the case (reversing the judgment and allowing the plaintiff to proceed). (Id. at pp. 179, 183.) However, as even the Mosk opinion explicitly recognized (id. at pp. 175-176), the Kennard opinion fully concurred in the Brown opinions analysis that state law is entirely preempted and explicitly rejected the Mosk opinions analysis. (Id. at pp. 182-183 & fn. 1.) The Kennard opinion allowed the plaintiff to proceed only because it did not believe she was an officer. (Id. at pp. 179-180.)

These are the controlling principles of law that we apply in the present case. Although the plaintiff invokes decisions of various subordinate federal courts to the contrary, these cannot supplant Wells Fargo or Peatros, and we therefore do not take any account of them. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455; People v. Bradford (1997) 15 Cal.4th 1229, 1292.)

B

Although plaintiffs briefing has made our task difficult, we now proceed to the outlines of her position. First, she does not believe that a low-position employee such as herself can be an officer for purposes of the NBA through her mere designation as such in resolutions of the Banks board of directors, where her sole authority to bind the defendant in transactions with other parties is her power to approve an advance on uncollected funds to a depositor or withdrawals (as to which there is undisputed evidence of at least one unfortunate exercise).^[12] Second, she believes that even if she is an officer under the NBA, she may nonetheless maintain causes of action under state law. The first contention, while a closer question, is unavailing. The second is simply untenable.

It is true the plaintiff had extremely limited authority. She nonetheless exercised it in connection with a fundamental banking operation (permitting the withdrawal of funds) in which she would be perceived as acting for the Bank and in which she potentially could affect the Banks reputation. To those who seek to obtain such a withdrawal (at least those with bona fides), she would appear to wield a superior power to a mere teller, and the extent to which she either met with expectations or dashed them would have an impact on their opinions of the Bank. The plaintiff may claim that she was only a glorified teller, but if a teller was also designated as an officer through board action and wielded equivalent authority, then we would come to the same conclusion.^[13] She suggests that her approval did not involve a legal instrument, but this is a focus on form rather than effect. Finally, her claim that this type of transaction is not a third party situation, even if it is an accurate statement of the opinion of banking treatises, is contrary to the express language of Wells Fargo quoted above in which depositors and customers are equated with third parties. We will not disregard the Supreme Court on the issue.

This leaves her puzzling claim that she can proceed with her causes of action under state law, preemption notwithstanding. To the extent this rests on the Mosk opinion in Peatros or any cases in accord with it, the plaintiff moors her argument to a rotten piling. She also seems to suggest that since she struck any allegations in her complaint tying her legal theories to her (constructive) dismissal, she may proceed because the NBA applies only in the context of dismissals. This attempt at splitting hairs fails. As noted in the Mosk opinion in Peatros, a banks decision to demote an officer would also be within the ambit of the NBA because the greater power to dismiss an officer also includes the lesser power to demote. (22 Cal.4th at p. 177.) This is in accord with the statement in Wells Fargo, quoted above, that any cause of action under state law for breach of the employment contract is preempted, which necessarily applies to any claim that discrimination caused the plaintiff to suffer adverse impacts in the terms and conditions of her employment other than dismissal. We therefore reject this argument.

The plaintiff is an officer for purposes of the NBA, and cannot allege a cause of action under state law that does not involve the terms of her employment contract. As a result, the trial court was correct in granting summary judgment on all of the causes of action arising under state law.

II

The plaintiff contends that the trial court erred in finding that she does not have a viable claim under the FMLA. She seems to argue that had she been allowed to take medical leave to address her foot problems without fear of dismissal, she would not have taken medical leave for stress (ending in her premature retirement) and instead would have been able to continue working. She apparently believes the FMLA is the vehicle through which she can seek the resulting difference in her earnings. However, other than make a passing reference in her reply brief, she entirely ignores a more fundamental problem with this cause of action that the defendant raises: the trial court never should have allowed her to pursue this cause of action after the federal court remanded the matter for want of a question of federal law.

In deciding whether to remand a case to state court for want of jurisdiction, a district court looks to all the allegations in the pleadings, regardless of the manner in which a plaintiff has chosen to characterize them, in order to determine if they state a federal cause of action. (Moreau v. San Diego Transit Corp. (1989) 210 Cal.App.3d 614, 620-621.) The district courts ruling on this jurisdictional issue is final, as it is not subject to reconsideration or review through mandate or appeal. (Powerex Corp. v. Reliant Energy Services, Inc. (2007) ___ U.S. ___ [127 S.Ct. 2411, 2415]; Seedman v. U.S. District Court (9th Cir. 1988) 837 F.2d 413, 414.) The final order (as determined under federal law) of a federal court on a federal question is given full faith and credit in our courts, and therefore has the same effect. (Levy v. Cohen (1977) 19 Cal.3d 165, 172-173; Nathanson v. Hecker (2002) 99 Cal.App.4th 1158, 1163.)

Consequently, the superior court did not have jurisdiction to decide that the remanded complaint retained a cause of action under federal law for a violation of the FMLA. (Ford v. Superior Court (1986) 188 Cal.App.3d 737, 742.)^[14] The failure of the defendant to raise this issue in the trial court is immaterial. (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal,  398, p. 450.) We accordingly disregard plaintiffs argument on this issue, in which she takes the defendant to task for initially asserting this principle on appeal.

It is not an answer to claim that only the third and fourth causes of action were part of the plaintiffs dismissal in federal court, and not her cause of action under the FMLA. The plaintiffs dismissal represented to the district court that the third and fourth causes of action contained her claims for relief involving federal subject matter jurisdiction. We will not allow her to trifle with the courts by conjuring this cause of action from the remaining allegations (cf. California ARCO Distributors, Inc. v. Atlantic Richfield Co. (1984) 158 Cal.App.3d 349, 364 [having expressly disclaimed reliance on a federal cause of action in district court proceedings, plaintiffs may not invoke it on remand]), especially where the district court had rebuffed her explicit effort to add it through amendment.

Even though it was for different reasons, the superior court was therefore correct in granting summary judgment on the FMLA cause of action after putting the defendant through the process of attacking it on the merits. As a result, we do not need to address her substantive arguments.

Disposition

The judgment is affirmed. Respondent is awarded its costs on appeal. (Cal. Rules of Court, rule 8.276(a)(1).)

DAVIS , Acting P.J.

We concur:

NICHOLSON , J.

BUTZ , J.

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^[1] Indeed, the plaintiff asserts there are few material factual issues relevant to the questions of law raised in this appeal.

^[2] We draw this evidence solely from the materials produced in connection with the motion for summary judgment based on federal preemption. We disregard the plaintiffs selections of evidence produced in connection with other motions in the record seeking to revisit the preemption issue, because she does not at any point address the propriety of the other rulings rejecting her efforts to bring new material before the trial court on the preemption issue.

^[3] The 1996 resolution includes a footnoted proviso that For purposes of ranking officer titles, the . . . title of Authorized Officer holds a level of signing authority equivalent to the Assistant Vice President title. While the plaintiff argues at length that the attributes of her position did not in any way equal those of an assistant vice-president, this has nothing to do with the rank of her title and is immaterial to her status as an officer.

In addition to the specified officer titles, the resolutions also provided that any of the Banks position titles with a grade of 75 or more were officer titles. Because the plaintiffs position title had a grade of only 53, this provision is immaterial to the present appeal (as are her arguments emphasizing the grade of her title).

^[4] Although the Bank submitted a dozen or so resolutions that designated the authority in abstract of various officers to act for the Bank in different transactions, many do not even appear to include an authorized officer, and nothing establishes that any of these functions were actually part of the plaintiffs job duties. We therefore disregard them.

^[5] Again, given our disposition of the plaintiffs claims under federal law, we do not need to delve into the factual disputes between the parties and simply accept the plaintiffs account.

^[6] These included a breach of the legally implied covenant of good faith and fair dealing, which in the employment context had at this point been discredited in numerous Court of Appeal opinions and was definitively laid to rest in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 348-353, as being either invalid or superfluous to other theories of employment law.

^[7] The defendant initially cross-appealed on this issue, but has acceded to our dismissal of it.

^[8] The plaintiff also renoticed her motion for leave to amend her complaint to add these theories, even though she had stated to the court and opposing counsel before the March 2004 trial date that she would not be pursuing them. The plaintiff subsequently dropped the motion.

^[9] In the course of this motion, the defendant contended that the plaintiffs litigation conduct should estop her from now including an FMLA cause of action.

^[10] She had sought leave to file an amended pleading after the September 2004 ruling on federal preemption. The court had denied the motion without prejudice because she had realleged state causes of actions, and her suggestion that these could be the subject of a motion to strike merely creates unnecessary work for the Court and defendant.

^[11] In this motion, the plaintiff had accused the defendant Bank of fraudulently misrepresent[ing] its records to the Court. She renews this baseless accusation on appeal.

^[12] This is the sole criterion we need to address. The facts otherwise establish conclusively that the Banks board created the position of Authorized Officer (duly recorded in the bylaws), appointed the plaintiff to it at the pertinent time, and approved her separation from the employ of the defendant. Her arguments to the contrary regarding these other criteria do not merit plenary response.

^[13] We note the plaintiff could approve a significant advance on uncollected funds or withdrawals. We do not suggest that more trifling amounts would necessarily satisfy this Wells Fargo criterion.

^[14] To the extent Hansen v. Aerospace Defense Related Industry Dist. (2001) 90 Cal.App.4th 977, 985, suggests otherwise, we believe it improperly fails to distinguish between a federal cause of action and a federal defense such as preemption.