No. B 073234

ALANA SHOARS,Plaintiff and Appellant


EPSON AMERICA, INC.,Defendant and Respondent.April 14, 1994

1) Plaintiff Alana Shoars appeals from summary judgment in favor of defendant Epson America, Inc. (Epson) in her action for wrongful discharge and slander. We affirm the summary disposition of the first cause of action but reverse with respect to the latter.[FN1]

FN1. When it appeared that a cross-complaint between the parties might still be pending, we requested supplemental information and briefing on the question of appellate jurisdiction. (See California Dental Assn. v. California Dental Hyaienists' Assn. (1990) 222 Cal.App.3d 49, 58-60.) In response, Epson apprised us that although its municipal court action against plaintiff had been consolidated with this case, before entry of judgment the parties had stipulated that the cross-action be dismissed -- without prejudice, and subject to refiling in the event of reversal here. Although the latter provisos could be construed as an effort to contrive an appealable judgment (see id. at pp. 58-59), we conclude that we do have jurisdiction over this appeal, inasmuch as the originally independent cross-action has been dismissed, and there is no assurance it would arise again in this action.


2) Plaintiff's second amended complaint (complaint) alleged three causes of action. The first, for wrongful discharge, alleged that plaintiff had been employed by Epson to provide training and user support for software use, emphasizing Epson's electronic mail (e-mail) system, which allowed about 700 employees to communicate, through telephone connections, with other computer users outside Epson. Employees accessed the e-mail using personal passwords, and plaintiff had informed them their e-mail was private and confidential.

3) Plaintiff alleged that beginning in August 1989 her supervisor at Epson, Hillseth, acting on Epson's behalf, .tapped. the e-mail, printed it, and read it. Upon discovering this, plaintiff removed some of the printouts from Hillseth's open office, and insisted he cease. Hillseth threatened to fire her if she interfered. Plaintiff nonetheless reported Hillseth's activity to Epson's general manager. Hillseth then had plaintiff fired, on the pretext she had been insubordinate in asking Epson's e-mail manager to provide her a personal outside e-mail line that Hillseth could not access.

4) Plaintiff alleged her termination occurred in retaliation for her reporting of and refusal to go along with Hillseth and Epson's intercepting the e-mail, which in turn violated the public policy and prohibitions concerning wiretapping and eavesdropping stated in Penal Code sections 630-632.5) The complaint alleged a second cause of action under Penal Code section 637.2 (which provides for a private action), to the effect that Hillseth had conspired with Epson's employee relations manager, LaMonte, to use plaintiff's intercepted message requesting a personal e-mail line. In a final cause of action, for slander, plaintiff alleged that just before she was fired, Hillseth and LaMonte falsely told several other Epson employees (plaintiff named eight of them) .that plaintiff had a gun and had threatened to come back into the plant and shoot people..

6) The complaint named Hillseth and LaMonte as defendants along with Epson. Earlier, plaintiff had separately sued Hillseth and LaMonte on the statutory cause of action. Shortly before filing her complaint against all parties, plaintiff had voluntarily dismissed the separate action against Hillseth and LaMonte. Inadvertently or not, the dismissal was taken with prejudice.

7) All defendants generally demurred to the entire complaint. The court sustained the demurrer to the statutory cause of action without leave to amend, but overruled as to the wrongful discharge and slander claims. Defendants then moved for summary judgment, on the theory that the case against Hillseth and LaMonte was barred by res judicata, in light of the dismissal with prejudice, and was similarly barred as against Epson because Epson's alleged liability was based only on the acts of Hillseth and LaMonte. The court granted summary judgment to Hillseth and LaMonte, but denied Epson's motion.

8) Shortly before the trial date, Epson again moved for summary judgment. Epson once more asserted that suit against it was precluded by plaintiff's having dismissed her related action against Hillseth and LaMonte. In addition, Epson challenged the wrongful discharge claim on substantive grounds.

9) Accompanying its motion, Epson filed a .separate statement of undisputed material facts. under Code of Civil Procedure section 437c, subdivision (b) (subdivision (b)), which listed nine such facts, seven of them based upon the contents of the complaint and the court's prior grant of summary judgment to Hillseth and LaMonte. With her opposition, plaintiff provided a separate statement of triable material issues of fact under subdivision (b), which did not, as required, also respond to the facts in Epson's statement.

10) The trial court granted Epson's motion. The minute order of these proceedings stated in part, Here, [plaintiff] has only supplied a 'Statement of Triable Issues of Material Fact and Supporting Evidence.' She has made no attempt to respond to the facts set out by [Epson] in its separate statement. The Court declines to sift through Plaintiff's papers to discern whether there is actually a factual dispute in this case. [FN2]

FN2. The minute order text quoted above may have been prepared by a commissioner, rather than the judge who ruled. But the court seems to have adopted that order; and in any event, a subsequent attorney order which the court signed also referred to and relied upon Plaintiff's failure to oppose any fact in Epson's Separate Statement . . . ..


11) Plaintiff contests the summary judgment only on - grounds the court abused its discretion in granting the motion for failure to file a complete separate statement under subdivision (b). We agree that this was not an appropriate case in which to grant summary judgment for that reason. Epson's motion was essentially made on legal grounds, and Epson's undisputed facts, to which plaintiff did not formally respond, largely concerned the existence and contents of the complaint and the order granting summary judgment to Hillseth and LaMonte. Plaintiff's failure to stipulate to these facts on file, while technically inappropriate, did not hinder consideration of the motion. The summary judgment statute fundamentally provides that the motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., 437c, subd. (c), emphasis added.) That legal question, and the subsidiary legal issues raised, were the focus of this motion.

12) But for similar reasons, reversal is not necessarily required. Even assuming the deficient separate statement was why the court granted the motion, the summary judgment must be sustained if correct on any theory presented. (Perez v. 222 Sutter St. Partners (1990? 222 Cal.App.3d 938, 943, fn. 4.) We therefore consider, de novo, the legal basis for the summary judgment. (See ibid.; Saldana v. Globe-Weis Svstems Co. (1991) 233 Cal.App.3d 1505, 1515.)

13) The judgment cannot be sustained on the basis that plaintiff's dismissal with prejudice of her action against Hillseth and LaMonte exonerated Epson. Epson relies on the doctrine that a judgment determining an employee's lack of fault also bars suit against the employer for derivative liability. (E.g., Freeman v. Churchill (1947) 30 Cal.2d 453, 461.) But this doctrine is a species of nonparty collateral estoppel (see 7 Witkin, Cal. Procedure (3d ed. 1985) Judgment, 302, pp. 740-741), which in turn applies only to issues actually litigated and decided in the first action. (People v. Sims (1982) 32 Cal.3d 468, 484.) Here, no issues were determined by plaintiff's voluntary dismissal of the separate action against Hillseth and LaMonte. Whatever its res judicata or retraxit effect as between plaintiff and the individual defendants (see Torrey Pines Bank v. Superior Court (1989) 216 Cal.App.3d 813, 820-821), that dismissal did not create any collateral estoppel running in favor of Epson. (See id. at pp. 825-829 (dis. opn.).)

14) In this light, summary adjudication of plaintiff's third cause of action, for slander, was inappropriate. The alleged statement that plaintiff had a gun and had threatened to return to Epson's plant and shoot people could qualify as slanderous under Civil Code section 46. Although the comments might be conditionally privileged, Epson did not attempt to prove that defense on its motion. [FN3]

FN3. We do not consider other allegedly defamatory statements that are not presently embraced in the pleadings. However, summary adjudication was proper with respect to the wrongful discharge cause of action, based on alleged retaliation for plaintiff's resistance to and reporting a claimed violation of Penal Code section 631 in Hillseth's tapping Epson's e-mail.

15) In a declaration reiterating her complaint, plaintiff, without any showing of personal knowledge, averred that Epson and Hillseth .had placed a tap on the electronic mail gateway where [Epson's] mainframe computer interfaced with the outside MCI E-Mail communications service.. In a responsive declaration, Hillseth stated that in the summer of 1989 Epson began to equip and train its employees with special .Gateway. hardware and software that allowed Epson's internal e-mail system to access the external, MCI telephonic e-mail system. The Gateway system automatically logged messages sent and received, and could be directed also to .download. the messages to Epson's computer. The system was installed and maintained with this feature activated, to allow technical troubleshooting of the e-mail system. Downloaded messages were automatically erased as new ones were entered. Hillseth declared that he worked with the message file to assist users with problems they reported; in doing so, he printed out and flipped through copies of the messages, to find and read those with which problems were being experienced.

16) The foregoing facts do not present a triable issue that Hillseth or Epson violated Penal Code section 631 (section 631). Section 631 essentially proscribes (1) tapping telephone lines, (2) making unauthorized connections with them, or (3) reading or attempting to learn the contents of a communication, without consent of all parties or in any unauthorized manner, while it is passing over a wire or is being sent from or received at any place in California. (631, subd. (a); Roaers v. Ulrich (1975) 52 Cal.App.3d 894, 898; see Ribas v. Clark (1985) 38 Cal.3d 355, 359-360.). [FN4] Neither plaintiff's nor Hillseth's declarations reflected any tapping or unauthorized connection with a telephone line; the only such line in question -- if any -- was MCI's outside transmission line. And as to the third prohibition, downloading of messages into storage by Epson's computer software did not constitute reading them or attempting to learn their contents. (See Rogers v. Ulrich, supra, at p. 898; cf. People v. Wilson (1971) 17 Cal.App.3d 598, 603.)

FN4. Section 631 was repealed and reenacted without substantive change effective January 1, 1994. The version applicable to the events in suit has been noted for its ambiguity. (E.g., Warden v. Kahn (1979) 99 Cal.App.3d 805, 811.)

17) Plaintiff also sought to bring her complaint about the downloading within other public policy sources. None of these applied either. Penal Code section 632, subdivision (a) prohibits eavesdropping on or recording confidential communications, as defined in Penal Code section 632, subdivision (c), by means of any electronic amplifying or recording device. We do not construe the latter subdivision as rendering e-mail messages sent or received as part of Epson's business .confidential. as to Epson itself. (Cf. People v. Soles (1977) 68 Cal.App.3d 418, 421.) Moreover, Penal Code section 630 and Article I, section 1 of the California Constitution, which more generally declare rights of privacy, cannot reasonably be read to protect against business place conduct that does not violate the particular proscriptions of the adjacent Invasion of Privacy Act sections.

18) Plaintiff's first cause of action therefore was properly subject to summary adjudication. Epson having sought such adjudication as well as summary judgment, we may and shall direct entry of a corresponding order. (See White Motor Corp. v. Teresinski (1989) 214 Cal.App.3d 754, 764, fn. 17.)


19) The judgment is reversed. On remand, the trial court shall enter a new order (a) summarily adjudicating that plaintiff's first cause of action has no merit and (b) denying defendant's motion for summary judgment, etc., in all other respects. The parties shall bear their own costs.


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