EEOC California

Appellant employee challenged an order of the Superior Court of the City and County of San Francisco (California), which granted respondent workers' compensation insurer's demurrer to appellant's action against respondent for intentional breach of the duty of good faith and fair dealing and for intentional infliction of emotional distress after respondent denied appellant's claim.

Appellant employee sustained a work-related injury. Respondent workers' compensation insurer assured appellant that it would pay for his care and treatment, and that he did not have to file a claim. Subsequently, and after some delay, respondent declined to pay a doctor's bill on the basis that the services were not related to the injury. Appellant then brought an action against respondent for intentional breach of the duty of good faith and fair dealing and for intentional infliction of emotional distress. The trial EEOC California granted respondent's demurrer on the basis that the action was barred by the exclusivity provision of the workers' compensation act, Cal. Lab. Code § 3600. The appellate court affirmed, holding that appellant failed to allege any readily and objectively identifiable conduct on the part of respondent that would take it out of the role of insurer and place upon it a duty with respect to appellant. Rather, appellant merely alleged negligent performance of respondent's usual functions, which could not form the basis for an independent lawsuit. Further, the conduct of respondent was not outrageous so as to exceed the bounds of that usually tolerated.

The appellate court affirmed the order of the trial court, which granted respondent workers' compensation insurer's demurrer to appellant employee's action against respondent for intentional breach of the duty of good faith and fair dealing for failing to pay appellant's medical bill. Appellant's action was barred by the exclusivity provision of the workers' compensation act and respondent's conduct was not outrageous.

Plaintiffs appealed a judgment of the Superior Court of Los Angeles County (California), which dismissed their complaint that alleged wage and hour violations after sustaining defendants' demurrer without leave to amend. Defendants demurred on the ground that plaintiffs were collaterally estopped from seeking class certification because the issue of class certification was decided against plaintiffs by the trial court in a prior related action.

The court held that, under California law, the denial of class certification could not establish collateral estoppel against unnamed putative class members on any issue because unnamed putative class members were neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to be considered in privity with such a party for purposes of collateral estoppel. In the instant case, plaintiffs were not named plaintiffs in the prior action, and the trial court in that case denied class certification. Accordingly, plaintiffs as unnamed putative class members in the prior action could not be bound by collateral estoppel with respect to any issue decided in connection with the denial of class certification. The sustaining of the demurrer to the class action allegations based on collateral estoppel was thus error. Moreover, the dismissal of plaintiffs' individual claims and representative claims under California's Private Attorneys General Act of 2004, Lab. Code, § 2698 et seq., was error.

The court reversed the judgment with directions that the trial court vacate the order sustaining the general demurrer to each count alleged in the complaint and enter a new order overruling the demurrer.