In Carter v. Entercom Sacramento LLC, the California Court of Appeal for the Third Appellate District decided a case involving a fee claim made by an employee. The fees were generated in litigation that arose from a fatal water drinking contest, sponsored by a radio station.
In a radio promotional event, an employee passed out water bottles to contestants and invited them to engage in a water-drinking contest. As a result, one participant died from drinking too much water. This resulted in lawsuits against the radio station and the employee.
The employee retained counsel to represent him personally in the matter. The employee also tendered the lawsuit to the radio station’s insurer. The carrier for the radio station agreed to defend the employee and appointed counsel on his behalf. However, the employee insisted on using his own counsel and kept him on the case. The personal counsel for the employee incurred significant attorney fees in the litigation. The lawsuits subsequently settled, and the employee sought indemnity from the radio station for the fees and costs incurred by the personal lawyer.
The lower court concluded that the employee was not entitled to any recovery for fees incurred after the date insurer-appointed counsel was retained for him. The court found the employee’s refusal to accept counsel appointed by the radio station was inappropriate. The employee appealed, arguing that he had an absolute right to choose his own attorney to represent him at the radio station’s expense under Labor Code Section 2802(a).
The court of appeal affirmed the trial court’s ruling. The court stated that under Section 2802(a), an employer is required to indemnify its employee “for all necessary expenditures or losses” that the employee incurred as a result of performing his employment duties. The court noted that the employee’s actions in retaining separate counsel where capable counsel was appointed, was unreasonable and the fee claim was rejected on that basis.