Katzberg v. Regents of University of Cal.

105 Cal. Rptr. 2d 586, 88 Cal. App. 4th 147
CourtCalifornia Court of Appeal
DecidedJuly 18, 2001
DocketC035456
StatusPublished

This text of 105 Cal. Rptr. 2d 586 (Katzberg v. Regents of University of Cal.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Katzberg v. Regents of University of Cal., 105 Cal. Rptr. 2d 586, 88 Cal. App. 4th 147 (Cal. Ct. App. 2001).

Opinion

105 Cal.Rptr.2d 586 (2001)
88 Cal.App.4th 147

Richard W. KATZBERG, Plaintiff and Appellant,
v.
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA et al., Defendants and Respondents.

No. C035456.

Court of Appeal, Third District.

March 30, 2001.
Review Granted July 18, 2001.

*588 Siegel & Yee, Dan Siegel, for Plaintiff and Appellant.

Pahl & Gosselin, Kenneth L. Kann, San Francisco, Nanette Joslyn, El Sobrante, James E. Hoist, John F. Lundberg and Jeffrey A. Blair, Oakland, for Defendants and Respondents.

*587 MORRISON, Acting P.J.

Plaintiff Richard W. Katzberg was removed from his position as chair of the Department of Radiology (the Department) at the University of California Davis Medical Center (University) as the result of an investigation into financial improprieties in the department. Katzberg sued the Regents of the University (Regents) and certain University officials for violation of his liberty interest by stigmatizing his name in terminating him and breach of the covenant of good faith and fair dealing. The trial court granted the Regents' demurrer to the contract claim and motion to strike injunctive relief, damages and attorney fees. The court found the remaining cause of action for violation of due process was moot as Katzberg's only remedy was a name clearing hearing that the Regents had already offered. Katzberg appeals, contending the court erred in granting summary judgment as the Regents' proposal for a name clearing hearing three and a half years later did not remedy the due process violation, damages were available, and the charges against him were constitutionally stigmatizing. He further contends it was error to sustain the demurrer to his contract claim and an abuse of discretion to refuse him discovery. We affirm.

FACTUAL AND PROCEDURAL

BACKGROUND

In 1991, Katzberg was appointed professor and chair of the Department at the University. In February 1996, a University press release announced an investigation of alleged mishandling of funds by the Department. The investigation had been initiated the previous July and included a review of the Department's records for the past five years. The Sacramento District Attorney's Office was involved. At issue were $250,000 allegedly placed inappropriately in radiology accounts for Department expenses and $80,000 placed in unauthorized accounts for social events. Most of this money came from rebates provided by medical equipment vendors pursuant to negotiations with a consortium of more than 100 academic teaching institutions. The following month, on March 1, 1996, the University announced in another press release that "appropriate personnel actions" *589 had been initiated. No specific personnel were named.

On March 21, 1996, Katzberg was terminated as chair of the Department. He remained a tenured professor at the University Medical Center.

Katzberg brought an action against the Regents pursuant to title 42, section 1983 of the United States Code, to vindicate his liberty interests and rights to procedural due process under the Fourteenth Amendment of the United States Constitution. Katzberg alleged the case also arose under the California Constitution. The Regents removed the action to federal court. Katzberg's first amended complaint was dismissed.

A second amended complaint named as defendants the Regents and four University officials. The second amended complaint alleged: "The decision by Chancellor Vanderhoef to terminate Dr. Katzberg from his position as chair of the Department of Radiology was based upon unproved allegations of misconduct against Dr. Katzberg which stigmatize his reputation, seriously impair his opportunities to earn a living and to advance his career as an academic leader, and damage his standing and associations in the medical community. Specifically, the charges against Dr. Katzberg include allegations of financial mismanagement, misuse of university resources, and improprieties in dealings with university vendors. The gist of such allegations was that Dr. Katzberg was guilty of conduct constituting immoral behavior and criminal dishonesty." The complaint further alleged Katzberg had not been provided with a hearing to defend himself and clear his name before the termination.

The second amended complaint included three claims for relief: under title 42 United States Code section 1983, under article I, section 7 of the California Constitution, and breach of the implied covenant of good faith and fair dealing in the agreement by which Katzberg was appointed chair of the Department.

The federal court dismissed the section 1983 claims and remanded to state court the claims under the California Constitution and for breach of covenant.

Katzberg filed a third amended complaint, naming as defendants only the Regents and Larry Vanderhoef, the Chancellor of the University of California, Davis (the Chancellor). The third amended complaint contained the same allegations as quoted above and the lack of a name-clearing hearing. In addition, the complaint detailed the allegations against Katzberg and alleged the Regents and certain employees and agents "made public statements in which they accused Dr. Katzberg of immoral, dishonest, and criminal actions. These statements accused Dr. Katzberg of diverting university funds into unauthorized bank accounts, improperly soliciting funds from university vendors, misusing public resources for social events, and violating both university regulations and state laws. These charges were false." The complaint alleged a violation of Katzberg's liberty interest protected by the article I, section 7 of the California Constitution.

In addition, the complaint alleged Katzberg entered into an employment agreement with the Regents. Under the terms of this agreement he would be appointed chair of the Department; he would exercise authority over personnel, budget, and operations of the Department; he would be granted authority to take all reasonable measures to improve the Department's unsatisfactory performance and improve morale; he would be given authority to raise the prestige and performance of the Department through the recruitment and retention of personnel; and he would receive a negotiated salary of approximately $300,000 annually. Katzberg alleged the Regents breached the covenant of good faith and fair dealing implied in this agreement by the actions taken in removing him as chair of the Department.

The complaint sought preliminary and permanent injunctions requiring the Regents *590 and Vanderhoef to restore Katzberg to his position as chair of the Department, compensatory and general damages, attorney fees and costs.

Defendants demurred to the third amended complaint. They asserted the first cause of action failed because the alleged charges failed to rise to the level of severity required to implicate a constitutional liberty interest. The second cause of action failed because Katzberg was employed by statute rather than contract. Defendants moved to strike the requests for injunctive relief, damages and attorney fees.

The trial court overruled the demurrer as to the first cause of action, sustained it without leave to amend as to the second, and granted the motion to strike.

Katzberg then moved to compel deposition discovery. Defendants opposed discovery, contending Katzberg's sole remedy was a name-clearing hearing and the depositions he sought were not reasonably calculated to lead to discovery of admissible evidence.

Defendants moved for summary judgment.

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Bluebook (online)
105 Cal. Rptr. 2d 586, 88 Cal. App. 4th 147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katzberg-v-regents-of-university-of-cal-calctapp-2001.