Garamendi v. Golden Eagle Insurance

a determination is made on your claim, but there is no requirement that you be so contacted. You are therefore advised that you should describe the facts surrounding your claim in detail, and provide the calculations or documents supporting the ‘total amount’ of your claim, because your claims may be determined based on this information alone.”

Pursuant to that procedure, appellants filed timely proofs of claim on January 29, 1998, asserting claims for wrongful termination, fraudulent inducement of employment contract, defamation, and intentional infliction of emotional distress. In lieu of providing the “detailed explanation” called for by the instructions, appellants’ forms noted, “See attachments.” The attachments included (1) a conclusory statement of the damages claimed by each appellant; (2) a descriptive statement drafted in the form of a judicial complaint, signed by appellants’ attorney, that contained joint allegations to support their claims for defamation and intentional infliction of emotional distress; (3) a few letters, some written by appellants’ counsel; (4) a series of evidentiary documents relating to the underlying fraud that appellants claimed to have discovered; and (5) a copy of the class action complaint filed by Curry, the allegations of which supported their claims for wrongful termination and fraudulent inducement of employment contract. There were no personal statements by appellants.

The commissioner’s investigation of appellants’ claims appears to have been conducted primarily by an associate attorney of a private law firm representing the commissioner.^[1] According to a declaration subsequently prepared by the attorney, his investigation encompassed, in addition to the materials submitted with appellants’ claims, appellants’ Golden Eagle personnel files, depositions of appellants taken as part of the commissioner’s preconservatorship investigation of Golden Eagle’s activities, and declarations by participants in that investigation. The attorney also spoke with appellants’ counsel to obtain additional evidence and interviewed appellants’ former supervisors at Golden Eagle, both of whom flatly contradicted many of appellants’ contentions. A summary of these interviews was prepared for the commissioner’s consideration.

On March 19, 2002, the commissioner issued boilerplate notices of rejection of appellants’ claims, stating that the claims were “without legal or

factual merit.” The notices of rejection did not otherwise explain the bases of the rejections.^[2]

On April 17, 2002, appellants filed in the trial court applications for an OSC why their claims should not be allowed, as directed by Insurance Code section 1032. The applications for the OSC were accompanied by a memorandum of points and authorities and a set of evidentiary materials, some of which had not been submitted to the commissioner during the claims process. At the initial hearing regarding the OSC application, the trial court noted that before a final decision could be made it was necessary to determine (1) exactly what materials the commissioner reviewed, and (2) whether it was appropriate to permit additional discovery regarding appellants’ claims. The court indicated a willingness to entertain motions by appellants for further discovery. No such motions were made.

At the next hearing, on February 7, 2003, the trial court again expressed a willingness to permit additional discovery and gave the parties leave to file “whatever else you believe needs to be considered—either side needs to be considered at this hearing.” Appellants subsequently filed a significant amount of additional evidence, including their own declarations and a declaration by a damages expert. Virtually none of this additional evidence had been submitted to the commissioner during the claims process.

At this point, nearly a year after appellants had applied for an OSC challenging the claims rejections, the commissioner had yet to file any type of administrative record, although his counsel had submitted a declaration that described at least some of the materials the commissioner had reviewed. On March 27, 2003, the trial court issued an order directing the commissioner to lodge with the court the materials listed in that declaration. These documents served as the administrative record before the trial court, and must serve that function here, although it is not clear that they constitute a comprehensive collection of the documents considered by the commissioner.^[3] The collection filled eight volumes, although with some duplication of materials.

At a further hearing before the trial court on May 2, 2003, the court indicated that it tentatively had decided to affirm the commissioner’s rejections of appellants’ claims. In doing so, the trial judge noted that his review

had “ignored” his concerns and order, the trial judge rejected the proposed plan at the next hearing, on December 19, 2003. Rather than take advantage of the court’s earlier offers to allow resubmission of the claims to the commissioner, counsel for appellants insisted on “a ruling ... on the merits.” In response, the trial court adopted his tentative ruling, stating, “The issue before me was did the commissioner abuse his discretion in making the determination it made on the basis of the evidence it had before it. And I was provided with the evidence which they say was reviewed by them and based on their—the evidence that was reviewed by them and their decision I do not find that they abused their discretion.” In a written order issued later that day, the trial court reaffirmed its ruling. The court also dismissed Golden Eagle as a defendant in Curry’s class action, concluding that the claims presented in Curry’s proof of claim were identical to those alleged in the class action.

H. DISCUSSION

A. The Role of Extrinsic Evidence in the Review of the Commissioner’s Claims Determinations

Appellants have briefed their appeal without making any distinction between evidence that was actually considered by the commissioner and evidence submitted only later to the trial court.^[4] In contrast, the commissioner insists that only evidence he reviewed may be considered in evaluating the rejections. As a preliminary matter we must decide whether the trial court was entitled to consider, in reviewing the commissioner’s rejection of appellants’ claims, evidentiary material submitted by appellants that was not considered by the commissioner in making his determinations. This appears to be a matter of first impression.^[5]

Resolving this issue requires a general review of the statutes regulating the state’s takeover of a troubled insurance company. Insurance Code section 1011 authorizes the commissioner to apply to the superior court for an order creating a conservatorship over the assets of an insurance company upon a showing that, in very general terms, the insurer is “in such condition that its further transaction of business will be hazardous to its policyholders,

or creditors, or to the public," including insolvency. (Ins. Code, § 1011, subds. (d) & (i).) Upon such a showing, the trial court is directed to enter an order vesting title to “all of the assets” of the insurer in the commissioner and directing the commissioner “to conduct, as conservator, the business” of the insurer, to the exclusion of the insurer’s officers and employees. (Ins. Code, § 1011.) If the commissioner concludes that “it would be futile to proceed as conservator with the conduct of the business” of the insurer, the commissioner “may apply to the court for an order to liquidate and wind up the business.” (Ins. Code, § 1016.) The trial court overseeing the conservatorship is vested with substantial authority to aid the commissioner in the conduct of the troubled insurer’s business or liquidation, including the power to enjoin the prosecution of pending actions against the insurer. (Ins. Code, § 1020 & subd. (c).)

Once an order has been issued authorizing liquidation, the commissioner is directed to give notice to all shareholders and potential creditors of the insurer, who are provided six months to file with the commissioner any claims they might have against the insurer. (Ins. Code, § 1021.) Claimants are specifically directed to “set forth, under oath” a specific list of information, including “[t]he particulars” of the claim, whether it is secured, the amount, and “[s]uch other data or supporting documents as the commissioner requires.” (Ins. Code, § 1023.) Claims not submitted in accord with the statutory requirements “shall not be entitled to filing or allowance, and no action may be maintained thereon.” (Ins. Code, § 1024.)^[6] If the commissioner rejects a claim, “the claimant may apply to the court in which the liquidation proceeding is pending for an order to show cause why the claim should not be allowed.” (Ins. Code, § 1032.) Jurisdiction over lawsuits against the insurer, including those pending at the time of the conservatorship, and jurisdiction over lawsuits brought by the commissioner in the exercise of the commissioner’s authority as conservator is vested in the trial court overseeing the conservatorship. (Ins. Code, § 1058.)

Although courts have sometimes looked to the provisions of the federal Bankruptcy Code for guidance in interpreting the Insurance Code’s insolvency provisions (e.g., Webster v. Superior Court (1988) 46 Cal.3d 338 , 347-353 [ 250 Cal.Rptr. 268 , 758 P.2d 596 ] (Webster); Low v. Lan (2002) 96 Cal.App.4th 1371 , 1378 [ 118 Cal.Rptr.2d 60 ]; Garamendi v. Executive Life Ins. Co. (1993) 17 Cal.App.4th 504 , 516 [ 21 Cal.Rptr.2d 578 ]), the two schemes are significantly different in their treatment of claims. Under federal

bankruptcy practice, the entity conducting the affairs of the debtor has no responsibility for resolving the merits of claims. The debtor’s trustee may object to claims believed to be unjustified, but it is the bankruptcy judge who determines the validity of disputed claims. ( 11 U.S.C. § 704 (5); In re G.I. Industries, Inc. (9th Cir. 2000) 204 F.3d 1276 , 1280; 28 U.S.C. § 157 (b)(2)(B); In re Cambridge Biotech Corp. (Fed. Cir. 1999) 186 F.3d 1356 , 1371-1372; In re McLaren (6th Cir. 1993) 3 F.3d 958 , 965.) The trustee is therefore restricted to the role of, in effect, advocate for the interests of the estate of the debtor, while the judge is a neutral arbiter between debtor and claimants. The bankruptcy court’s rulings on claims are made only after the claimant is given the opportunity for a formal evidentiary hearing. ( 11 U.S.C. § 502 (b); In re Porges (2d Cir. 1995) 44 F.3d 159 , 164.)

In contrast, the Insurance Code vests the commissioner with the responsibility for acting both as “receiver or trustee” for the troubled insurer {Anderson v. Great Republic L. Ins. Co. (1940) 41 Cal.App.2d 181 , 188 [ 106 P.2d 75 ]) and as the adjudicator of claims against the company. (Ins. Code, § 1021; Webster, supra, 46 Cal.3d at p. 353.) Moreover, the commissioner has no statutory obligation to provide claimants a formal hearing when determining claims. Although the Insurance Code does not specify the procedure the commissioner is to use in evaluating claims, it has been assumed that an informal process is adequate. Commenting upon the obligation of the commissioner in handling a personal injury claim against an insolvent insurer, the Supreme Court noted in Webster, “If [the plaintiff] were forced to submit to the statutory claims procedure, the commissioner would have to conduct a thorough investigation of the claim to determine whether to pay it and, if so, how much .... [Insurance Code section 1058] suggests that a fiill and fair determination of a claim is required.” {Webster, at p. 353.) The commissioner’s determination of claims without providing a hearing to the claimant has been held not to constitute a denial of due process. (Low I, supra, 101 Cal.App.4th at p. 1367.)^[7]

If the trial court is asked to review the rejection of a claim, its review is conducted “in a summary show-cause procedure” under Insurance Code section 1032. {Webster, supra, 46 Cal.3d at p. 347.)^[8] It has consistently been

held that the trial court, acting on an OSC, must affirm the actions of the commissioner as conservator unless they constitute an abuse of discretion. The abuse of discretion standard was originally applied to the commissioner’s adoption of a plan of rehabilitation for the insolvent insurer, an administrative action requiring the exercise of a large degree of discretion. (Carpenter, supra, 10 Cal.2d at p. 329 [“The only restriction on the exercise of [the commissioner’s] power is that the state’s action shall be reasonably related to the public interest and shall not be arbitrary or improperly discriminatory”]; Commercial Nat. Bank v. Superior Court (1993) 14 Cal.App.4th 393 , 398 [ 17 Cal.Rptr.2d 884 ], citing Carpenter, In re Executive Life Ins. Co. (1995) 32 Cal.App.4th 344 , 358 [ 38 Cal.Rptr.2d 453 ]; Quackenbush v. Mission Ins. Co. (1996) 46 Cal.App.4th 458 , 466 [ 54 Cal.Rptr.2d 112 ].) The same standard has more recently been applied as well to review of the commissioner’s determination of claims. (Low I, supra, 101 Cal.App.4th at p. 1368 [noting that the appellant did not challenge application of the abuse of discretion standard in the trial court]; Low v. Golden Eagle Ins. Co. (U.S. Continental Marketing, Inc.) (2002) 104 Cal.App.4th 306 , 316 [ 128 Cal.Rptr.2d 423 ].)* ****^[9]

Applying the abuse of discretion standard, a trial judge is required to affirm the commissioner’s rejection of a claim unless: (1) the commissioner did not fulfill his obligation to provide “a full and fair determination” of the claim by, for example, failing to “conduct a thorough investigation of the claim” (Webster, supra, 46 Cal.3d at p. 353; see Nightlife Partners, Ltd. v. City of Beverly Hills (2003) 108 Cal.App.4th 81 , 89 [ 133 Cal.Rptr.2d 234 ] [failure to provide fair procedures or proceed in the manner required by law is an abuse of discretion]; Code Civ. Proc., § 1094.5); (2) the commissioner’s decision to reject the claim was not supported by substantial evidence (e.g., Architectural Heritage Assn. v. County of Monterey (2004) 122 Cal.App.4th 1095 , 1109 [ 19 Cal.Rptr.3d 469 ]); or (3) the commissioner applied an improper legal standard or otherwise based the determination on an error of law. (Quackenbush v. Mission Ins. Co., supra, 46 Cal.App.4th at p. 466.)

In light of this background, we now address the question originally posed: whether the trial court, in reviewing the rejection of appellants’ claims, was permitted to consider evidence that was not before the commissioner. For the reasons set forth below, we conclude that the trial court may

use evidence that was not before the commissioner in ruling on extrinsic issues, such as the fairness and thoroughness of the commissioner’s procedures, but in evaluating the commissioner’s ruling on the merits of a claim the trial court is restricted to evidence that was actually before the commissioner.

The Legislature’s adoption of an OSC as the procedural vehicle for review of the commissioner’s decisions suggests that it intended to permit the submission of evidence with an application for review. OSC’s are ordinarily accompanied not only by a declaration of counsel but also by supporting evidentiary documents, where needed. (6 Witkin, Cal. Procedure (4th ed. 1997) § 56, pp. 455-456.) The feature that distinguishes a proceeding on OSC from a trial is the summary nature of the OSC proceeding, which the court is empowered to decide on the basis of written evidentiary materials without taking Uve testimony. (Eddy v. Temkin (1985) 167 Cal.App.3d 1115 , 1120-1121 [ 213 Cal.Rptr. 597 ]; Reifler v. Superior Court (1974) 39 Cal.App.3d 479 , 485 [ 114 Cal.Rptr. 356 ].) Consistent with this understanding, trial courts have often considered evidence submitted by the parties as part of the “summary procedure” (Webster, supra, 46 Cal.3d at p. 347) used in reviewing the commissioner’s decisions.^[10]

It is significant that in most of the reported cases in which evidence has been accepted during review of a commissioner’s action, the action under review was the adoption of a plan of rehabilitation. Adoption of such a plan calls for the exercise of a high degree of discretion, requiring the commissioner to find a balance among the varying interests of the public and the insurer’s policyholders, creditors, shareholders and employees. Because the commissioner does not necessarily provide a means for the public to submit evidence during the formulation of such a plan, it is appropriate for the trial court, in reviewing the adoption of the plan, to accept evidentiary submissions from the various parties concerned about the plan’s impact.

In distinct contrast to the adoption of a plan of rehabilitation, the commissioner’s determination of claims is adjudicatory in nature. While there is no formal hearing, each claimant is given an opportunity through the claims filing process to submit evidence with his or her claim, and the commissioner presumably gathers further evidence during the “thorough investigation” (Webster, supra, 46 Cal.3d at p. 353) required to resolve the

claim. The claimant’s submission and the commissioner’s investigative activities combine to create the equivalent of an administrative record from which it can be determined what evidence was considered by the commissioner. The commissioner’s resolution of claims must be guided by the law applicable to the subject matter of the individual claim and is reviewed for its adherence to such law. (Quackenbush v. Mission Ins. Co., supra, 46 Cal.App.4th at p. 466.)

Because the commissioner’s determination of claims resembles an adjudication, and the trial court’s statutory role is solely one of review, we conclude that it is appropriate to apply a rule analogous to that applied by trial courts in reviewing adjudicatory administrative decisions under Code of Civil Procedure section 1094.5. While the trial court may accept and consider evidence that was not before the commissioner in reviewing the rejection of a claim, the court may consider that evidence solely for the purpose of ruling on issues other than the merits of the claim. Such extrinsic issues may include the thoroughness of the commissioner’s investigation, the fairness of the commissioner’s procedures, or the commissioner’s unjustified failure to consider relevant evidence. (See, e.g., State of California v. Superior Court (1974) 12 Cal.3d 237 , 257 [ 115 Cal.Rptr. 497 , 524 P.2d 1281 ]; Nightlife Partners, Ltd. v. City of Beverly Hills, supra, 108 Cal.App.4th at pp. 88-89.)^[11]

In contrast, the commissioner’s exercise of discretion in ruling on the merits of a claim must be evaluated only by reference to the evidence actually considered by the commissioner. Allowing the trial court to second-guess the commissioner’s judgment on the basis of evidence that was not before the commissioner would undercut the Legislature’s assignment to the commissioner of primary responsibility for the determination of claims, since parties could withhold critical evidence from the commissioner in favor of a hearing in the trial court. It would also shift the role of the trial court from the review anticipated by the Legislature toward de novo adjudication of claims, depending upon the nature and extent of new evidence proffered. Finally, allowing the trial court to base its review on extrinsic evidence would be inconsistent with the abuse of discretion standard, since any judgment of the reasonableness of the commissioner’s exercise of discretion in adjudicating a claim necessarily must be based on the evidence on which the commissioner actually based his or her decision. For these reasons, a claimant cannot be permitted to use the occasion of the trial court’s review of the merits of a claim under Insurance Code section 1032 to supplement the

record with evidentiary materials that could have been, but were not, submitted to the commissioner.^[12]

B. The Commissioner’s Determination of Appellants’ Claims

1. Estoppel

As an initial matter, appellants argue in their reply briefs that the commissioner should be “estopped” from asserting that the trial court’s review was restricted to evidence that was actually before the commissioner. According to appellants, counsel for the commissioner stated in correspondence that appellants would be given an opportunity to submit new evidence during the OSC proceeding. While it is by no means clear that the doctrine of estoppel could be applied to avoid the statutory scheme, we need not resolve that legal question because appellants’ claim of estoppel lacks factual support.

The letter in question, dated April 12, 2002, responds to a letter from appellants’ counsel. Appellants’ counsel’s letter, written after receipt of the commissioner’s denial of appellants’ claims but before the filing of appellants’ request for an OSC, suggests that the parties “stipulate] to the OSC” because “we were concerned about the impact the contents of our declarations might have on any possibility of resolving these claims.” The letter from the commissioner’s counsel begins by noting, “[W]ith respect to your concern about the contents of any declarations that you file with your OSC Application, please be aware that the application will not be your last opportunity to brief the merits of your clients’ claims.” After a discussion of the typical procedural steps in an OSC proceeding, counsel stated, “[I]f you are concerned about what information to put into a declaration . . . you can take some comfort in the fact that, if your OSC Application is filed timely, you will have additional opportunities in the future to brief the merits of the claims and to support them with appropriate declarations and other evidence.”

Contrary to appellants’ claim, the letter does not constitute a commitment to permit new evidence to be submitted to the trial court, but only “appropriate” evidence. Moreover, the context of the letter, written in response to an inquiry by appellants’ counsel about the timing of evidentiary submissions, makes clear that the commissioner’s attorney was merely discussing at what point in the OSC process evidentiary submissions must be made, not the content of those submissions. Regardless of the contents of the letter, however, it could not support a claim for estoppel. A claim of estoppel would

certain claims to him to avoid his detection of further fraud.^[13] Despite this treatment, Auen did not resign from Golden Eagle until one month after the commissioner had assumed control of the company, giving two weeks’ notice on February 28, 1997. By this time, an investigator for the commissioner had been appointed deputy conservator to manage the company. Top management of the company had changed hands, with the “senior managers . . . removed from their positions” and “[t]he remaining executive staff . . . reorganized.” There is no evidence of adverse working conditions for Auen after the change in management. On the contrary, Auen’s supervisor told the commissioner during an interview that “Auen simply walked in one day, handed in a resignation, and said he had gotten another job. . . . Auen had never complained to [the supervisor] about any beliefs that wrongdoing was going on at Golden Eagle and [the supervisor] was aware of no strife or workplace incidents that led up to the resignation.” Even if intolerable conditions had existed after the takeover, there is no evidence that the new management was aware of it. In short, there was virtually no evidence to support a constructive discharge of Auen, and the commissioner did not abuse his discretion in rejecting Auen’s claim on this ground.^[14]

Unlike Auen, Curry resigned from Golden Eagle before most of the controversy over the alleged fraud occurred. Again, appellants submitted little evidence bearing on Curry’s working conditions at the time of his resignation. In the descriptive statement, Curry alleges that he discovered Golden Eagle’s fraudulent accounting practices in April 1996, when a former customer complained to him. Curry reported the problems to his supervisor, but they were not addressed. Curry then made his own investigation and uncovered additional examples of similar fraud.

On May 20, 1996, Curry drafted a letter to Golden Eagle’s chief executive officer (CEO) which the descriptive statement characterizes as “outlining] his findings and concerns in detail.”^[15] According to the descriptive statement, he delivered the letter the next day. Later that day, Curry was called into the office of his supervisor, George Palmer. The statement alleges that Palmer both told Curry that he would never be fired because he now knew the company secret and threatened that Curry would never work in the insurance industry again if he did

reports of such persons. The substantiality of the commissioner’s evidence must be determined not by the fact that it is contained in an investigative report but by the evidentiary value of the underlying evidence.

Although the commissioner is not bound by the provisions of the Administrative Procedures Act (APA)^[16] in conducting his investigation, the provisions of Government Code section 11513, subdivision (c) of the APA provide a useful guide in this context. Section 11513, subdivision (c) allows the admission of testimony in an administrative hearing if it is “the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs.” Unlike the officers submitting reports in Gregory, Palmer was directly involved in the events at issue, and he appeared to have a clear recollection of them. The statements of such a person are the type of material on which responsible persons are accustomed to rely in the conduct of serious affairs. As such, Palmer’s interview could constitute substantial evidence to support the commissioner’s decision.^[17] The fact that the commissioner relied on his investigator’s report of Palmer’s words rather than interviewing Palmer himself does not undercut the evidentiary value of Palmer’s statements.^[18]

4. Defamation

Appellants’^[19] defamation claims are based on a January 30, 1997 letter written by outside counsel for Golden Eagle to the commissioner’s office. In that letter, Golden Eagle’s counsel characterizes the allegations in Curry’s class action and the activities of appellants’ counsel, who offered to accept $1 million in settlement of the class action, as “a prima facie case of attempted extortion.” No evidence of actual damages was provided.

Eagle’s CEO of the charges made in the letter. There is no evidence of such republication in the record of investigation submitted by the commissioner to the trial court. The sum total of such evidence was an assertion in the descriptive statement that “as part of a concerted campaign to discredit the order of conservatorship, [the CEO] and numerous other GOLDEN EAGLE employees named herein, published [the letter] to numerous individuals and entities with the intent that the defamatory statements concerning claimants contained therein would be disseminated and published to the general public as part [of] the media coverage surrounding the order of conservator-ship . . . .” This vague statement is insufficient to prove appellants’ claim. It is not enough simply to state that republication occurred, without providing at least the identity of the persons involved in the republication. Only one person, the CEO, is actually identified as having republished the letter, and no recipient of the republication is named. While appellants are correct that republication of a privileged communication to a nonparticipant in the proceeding is generally not privileged (Silberg v. Anderson (1990) 50 Cal.3d 205 , 219 [ 266 Cal.Rptr. 638 , 786 P.2d 365 ]), appellants do not appear to have provided the commissioner with actual evidence of such a republication.

In their submission to the trial court, appellants provided a copy of a letter written in 1998 by appellants’ counsel to the commissioner. This letter was not included in the record submitted by the commissioner.^[20] Appellants claim that this omitted letter brought to the attention of the commissioner sufficient facts to support their defamation claim. The omitted letter does not even mention Auen, Bove or Dunk. As to Curry, it states: “Golden Eagle made numerous statements that Mr. Curry was responsible for its problems with the Department of Insurance. In fact, Golden Eagle called Mr. Curry a ‘rogue employee’ and accused him of [wrongful activities]. [Golden Eagle’s CEO] made numerous television and radio shows [sic] appearances where Mr. Curry’s name was brought up and discussed. This conspiracy went so far as to create and backdate Golden Eagle internal memos to, as one such document said, ‘create the record’ in an effort to frame Mr. Curry.” The omitted letter also refers to “rumors . . . circulating]” that Curry was responsible for Golden Eagle’s seizure. Despite appellants’ claims, this letter also fails for vagueness. In setting out the initial charges, it fails to specify who made them or to whom they were made. Although the omitted letter states that Golden Eagle’s CEO made appearances on television and radio “where Mr. Curry’s name was brought up and discussed,” the mere statement that Curry was “discussed” by the CEO does not provide evidence of defamatory statements. Curry was required, at a minimum, to specify the defamatory content of the discussions. On the basis of appellants’ bare bones

“proof,” the commissioner did not abuse his discretion in rejecting their claims.^[21]

5. Intentional Infliction of Emotional Distress

Appellants’ claims of intentional infliction of emotional distress are premised on the same facts that support their other causes of action. To recover on this tort, a plaintiff must demonstrate (1) “ ‘ “ ‘extreme and outrageous conduct by the defendant,’ ” ’ ” (2) with the intention of causing, or reckless disregard of the probability of causing, emotional distress, and (3) resulting distress. (Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965 , 1001 [ 25 Cal.Rptr.2d 550 , 863 P.2d 795 ].) To be outrageous, the conduct “ ‘ “must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” ’ ” (Ibid.)

Given our conclusion that the commissioner did not abuse his discretion in finding that appellants failed to demonstrate the “intolerable” working conditions necessary to support a claim for constructive discharge, it follows that the commissioner did not abuse his discretion in finding a similar failure to prove the “extreme and outrageous” conduct necessary to support a claim for intentional infliction of emotional distress. Since the commissioner had before him essentially no evidence of nonprivileged conduct supporting appellants’ claims of defamation and fraudulent inducement, the only evidence available to support appellants’ intentional infliction claims would be the evidence developed in support of their claims for wrongful termination. Auen’s evidence demonstrated little more than that he had been told to keep quiet about his discoveries of fraud. This type of personnel activity is insufficient to support a claim for intentional infliction of emotional distress. (Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55 , 80 [ 53 Cal.Rptr.2d 741 ].) Although somewhat more information is available about Curry’s working conditions, at least during the last two days of his employment, the commissioner’s acceptance of Palmer’s account of those days, rather than Curry’s, provides substantial evidence to support his rejection of Curry’s claim of intentional infliction of emotional distress.