Dowie v. Fleishman-Hillard Inc.

Dowie v. Fleishman-Hillard Inc.

Opinion

 [*629]  MEMORANDUM ¹

Douglas Dowie appeals the district court's dismissal of his complaint against his former employer Fleishman-Hillard, Inc. ("FH") and Omnicom Group, Inc. ("Omnicom"), FH's parent corporation. Dowie seeks indemnification for legal defense fees and costs incurred following his indictment on conspiracy and wire fraud charges, which stemmed from his involvement with fraudulent billings submitted to certain FH clients. Although FH paid for his legal defense up to the time of his indictment, Dowie argues he was owed ongoing indemnification  [**2] of his defense costs. Dowie's complaint alleges the following claims: (1) that FH was required to cover all of his defense costs under California Labor Code § 2802; (2) that he is entitled to equitable indemnification; (3) that FH fraudulently concealed that it would stop funding Dowie's legal defense if he were indicted; (4) that he detrimentally relied on FH's promise to pay for his ongoing legal representation; and (5) that FH breached a written contract requiring it to provide ongoing defense funds. ²

A jury convicted Dowie of conspiracy and wire fraud under 18 U.S.C. § 371 and § 1343. ³ Subsequently, the district court dismissed his civil claims for indemnification under Rule 12(b)(6) of the Federal Rules of Civil Procedure. ] We review the district court's dismissal de novo, and may affirm on any basis fairly supported by the record. Corrie v. Caterpillar, Inc., 503 F.3d 974, 979 (9th Cir. 2007). We affirm. Because the parties are familiar with the facts and procedural history of the case, we do not recite them here except as necessary to our  [**3] decision.

First, the district court did not err in dismissing Dowie claim to indemnification under California Labor Code § 2802. The statute requires an employer to indemnify an employee for legal expenses incurred as a result of lawful or unlawful work-related acts, unless the employee "believed them to be unlawful." Cal. Labor Code § 2802(a). Dowie's claim under § 2802 fails as a matter of law because his involvement with fraudulent billings to FH clients resulted in his conviction for the specific intent crimes of conspiracy and wire fraud. ] To find a defendant guilty of these charges, a jury must conclude that he had the intent "to accomplish an illegal objective," United States v. Boone, 951 F.2d 1526, 1543 (9th Cir. 1991), and "knowledge of its fraudulent nature," United States v. Ciccone, 219 F.3d 1078, 1084 (9th Cir. 2000).

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