Hunt v. The Regents of the University of California

Filed 10/29/07 Hunt v. The Regents of the University of California CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

Professor C. Anthony Hunt appeals from a judgment entered in favor of the Regents of the University of California (the Regents or University) and individual defendants J. Michael Bishop, William J. Neff, Keith R. Wilson, Dorothy F. Bainton, George L. Kenyon, Mary Ann Koda-Kimble, Harry Condon and Kenton LeFore on Hunts complaint for violations of his civil rights under 42 United States Code section 1983 (section 1983) and for defamation. Hunts claims are based on conduct of the University and the individual defendants during the course of disciplinary proceedings that began in 1995. Hunt contends the trial court erred in sustaining without leave to amend the Universitys demurrer to his cause of action for defamation and in granting summary adjudication of his section 1983 claims against the individual defendants on the ground that his claims are barred by the statute of limitations. We agree with this portion of the trial courts conclusions and shall affirm its rejection of Hunts claims.

In a cross-appeal, the Regents challenge the trial courts issuance of a writ of mandate setting aside discipline imposed on Hunt on the ground that the administrative record does not support the underlying findings. We disagree with the trial court in this respect and shall vacate the writ of mandate.

Background

Hunt has been a faculty member of the University of California, San Francisco (UCSF) School of Pharmacy since 1977. Over the course of his career, Hunt has conducted significant research in cancer therapeutics, some of which has been funded by grants. In 1995, Hunt was accused by a researcher of misusing grant funds from the Office of Naval Research (ONR). The complaint was referred to the Universitys Director of Audit and Management Services who conducted an audit of the financial records of Hunts laboratory. In the course of the audit, investigators interviewed numerous witnesses and reviewed substantial documentary evidence. Hunt was provided a draft of the audit report, later an addendum to the draft, and was given an opportunity to respond to the auditors findings. In April 1998, the auditor issued a final report, concluding, among other things, that Hunt had misused ONR funds to support projects outside the scope of the grant, that two of Hunts outside consulting agreements violated University policy; and that Hunt had violated University policy by failing to deliver to the University payments received from two private companies for whom he consulted. The auditor recommended that the University initiate a formal faculty investigation into the funding of Hunts laboratory.

In May 1998, the University formed a three-member faculty committee (the Ad Hoc Committee) to conduct a formal investigation of the violations identified in the auditors final report. The Ad Hoc Committee met 11 times over the course of a year, interviewed numerous witnesses, and met with Hunt and his attorney on two occasions. In April 1999, the committee issued a final report concluding that the auditors findings were substantiated. The report recommended that ONR be reimbursed the funds used to pay for research unrelated to the ONR grant.

After reviewing the Ad Hoc Committee report, the vice-chancellor recommended, and the chancellor agreed, that Hunt should be suspended without pay for one year and that the University should repay ONR the grant money misused by Hunt. On September 7, 1999, Hunt was advised that he would be suspended unless he requested a hearing before the Committee on Privilege and Tenure (P&T Committee), which he did. Formal disciplinary charges before the P&T Committee were filed in November 2000.

In the meantime, in December 1999, the University created an escrow account to hold funds that might be needed to reimburse the ONR. Pursuant to a request by the vice-chancellor, $182,500 was transferred to the escrow account from Hunts discretionary spending account with the University. Much of the transferred money had been deposited in the discretionary account by Hunt himself so that he could continue his research after grant funding was frozen during the investigation. In July 2000, before the P&T Committee had resolved the disciplinary charges against Hunt, the University issued a check to the ONR for $97,383. The remaining funds were returned to Hunts discretionary account.

In March 2001, Hunt submitted a grievance to the P&T Committee, objecting to unreasonable delays in the investigation of the alleged misconduct and to the use of his discretionary funds to repay the ONR. A subcommittee of the P&T Committee investigated Hunts grievance and ultimately issued a written report concluding that Hunt had not stated a prima facie case that the University violated his rights or privileges. The subcommittee concluded that the University had the right to return the funds under its control to the ONR, if it deemed a repayment was in the best interests of the University and that Dr. Hunts prior approval or consent was not required since the funds used were clearly the property of the [University]. The subcommittee explained that the repayment was made [a]s part of a good faith business decision to protect the interests of the University in dealing with Federal Agencies, concluding that the Universitys actions in this matter were reasonable and prudent. The report was adopted by the full P&T Committee in December 2002.

In July 2001, the P&T Committee heard the disciplinary charges against Hunt. On February 15, 2002, the P&T Committee issued a report concluding that the finding that Hunt misused ONR grant money could not be substantiated. The P&T Committee did find, however, that the University had proved that Hunt had maintained an unauthorized consulting relationship with a private company. The Chancellor accepted the P&T Committees findings and placed a letter of censure in Hunts academic file.

On February 7, 2003, Hunt filed a complaint and petition for writ of mandate against the University and the individual defendants. The complaint details the allegedly wrongful acts by each of the individual defendants as follows: J. Michael Bishop, M.D., is the Chancellor of the University of California, San Francisco, to whom the Regents have delegated the authority to hire, fire and discipline employees . . . . Bishop determined based on the investigation by the Ad Hoc Committee that Hunt should be suspended for one year without pay. Later, Bishop accepted the findings of the P&T Committee and directed that a letter of censure be placed in Hunts personnel file. William J. Neff, was at all relevant times Assistant Vice Chancellor for Administration. Keith R. Wilson was the Director of Faculty Relations. Wilson and Neff referred the initial complainant to the Office of Audit and Management Services for investigation. Harry Cordon was the Director of Audit and Management Services until July 1997, and Kenton LeFore was the Interim Director of Audit and Management Services from July 1997 until the audit was completed in April 1998. George L. Kenyon, who was Dean of the School of Pharmacy until September 1998, received the auditors report and recommended that a formal investigation be undertaken by the University. Dorothy F. Bainton, the vice-chancellor for academic affairs, appointed the members of the Ad Hoc Committee and was responsible for ensuring adequate and complete review by the Ad Hoc Committee and the [P&T Committee]. Mary Anne Koda-Kimble, Ph.D., was Dean of the School of Pharmacy beginning October 1998. At Neffs request, Koda-Kimble established the escrow account and transferred the funds to the escrow account from Hunts discretionary account.

The first three causes of action alleged claims under section 1983. The fourth cause of action asserted a claim for defamation. The fifth, sixth and seventh causes of action sought a writ of mandamus under Code of Civil Procedure sections 1085 and 1094.5 and the eighth cause of action requested declaratory relief.

The trial court sustained without leave to amend a demurrer to the section 1983 claims against the University on the ground that the University is not a person subject to suit under section 1983. Hunt does not challenge this ruling on appeal. The demurrer of the individual defendants to the section 1983 claims was overruled but the claims were stayed in all respects . . . unless and until petitioner is successful in overturning the final administrative decision. The court also sustained without leave to amend the demurrers of all defendants to the fourth cause of action for defamation. Thereafter, a first amended complaint (hereafter the complaint) was filed deleting the fourth cause of action and reorganizing others.

On August 5, 2004, the court granted Hunts petition for a writ of mandate and set aside the Universitys decision censuring Hunts improper consulting agreement. On May 13, 2005, after lifting the stay on the first three causes of action, the court granted the individual defendants motion for summary adjudication of the section 1983 claims on the ground that all claims against [the individual defendants] accrued prior to February [7,] 2002, and accordingly are time barred. Hunt filed a timely notice of appeal that was followed by a timely notice of cross-appeal by the Regents.

Discussion

I.Hunts Appeal

1. The Section 1983 Claims

Hunts first cause of action under section 1983 alleges that the individual defendants violated his constitutional rights by engaging in inordinate, unreasonable, and unconscionable delays [in the disciplinary proceedings] for which there was no excuse, . . . [b]y prejudging the issues and accepting at face value evidence which supported the charges, while ignoring or minimizing evidence which did not, by failing to obtain scientific expertise and consider scientific evidence before charging Hunt with scientific misconduct, by failing to retain evidence needed for the evidentiary hearing, and by losing or destroying other evidence. Hunts second and third causes of action under section 1983 allege substantive and procedural violations of his constitutional rights based on the unreasonable seizure of his research funds and repayment of grant funds to ONR. The trial court summarily adjudicated Hunts section 1983 claims in favor of the individual defendants on the ground that Hunts claims were untimely.[1] We review the grant of summary judgment de novo. (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348.)

In assessing whether plaintiffs claims against defendant are time-barred, two basic questions drive our analysis: (a) What statutes of limitations govern the plaintiffs claims? (b) When did the plaintiffs causes of action accrue? (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1316.) The parties agree that the one-year statute of limitations for personal injury actions (Code Civ. Proc.,  340, former subd. (3)) governs Hunts section 1983 claims. (Jones v. Blanas (9th Cir. 2004) 393 F.3d 918, 927.) While state law determines the period of limitations, federal law determines when a cause of action accrues. [Citation.] Under federal law a cause of action accrues, and the statute of limitations begins to run, when a plaintiff knows or has reason to know of the injury that is the basis of the action. (Alexopulos v. San Francisco Unified School Dist.(9th Cir. 1987) 817 F.2d 551, 555.) Hunt commenced this action on February 7, 2003. Accordingly, his claims are time-barred unless they accrued after February 7, 2002, or unless the statute of limitations was tolled.

Each individual defendant submitted a separate statement of undisputed material facts setting forth his or her involvement in the disciplinary proceedings and the date on which Hunt became aware of his or her allegedly wrongful conduct, which in each case is asserted to be before February 2002. Hunt does not dispute these facts, but contends nonetheless that his claims against the individual defendants did not accrue until March 2002 when the Chancellor accepted the P&T Committees disciplinary recommendation. Alternatively, he argues that if his claims did accrue prior to February 2002, the running of the limitations period was tolled during the administrative proceedings. Finally, he suggests there are unresolved factual issues regarding when he learned of his injuries that preclude summary adjudication.

First, Hunt argues that claims under section 1983 do not accrue until administrative proceedings have concluded. We disagree. There is no independent exhaustion requirement under section 1983. The favorable termination of optional administrative proceedings is not necessary to prosecute a section 1983 claim. (Felder v. Casey (1988) 487 U.S. 131, 147; Patsy v. Florida Board of Regents (1982) 457 U.S. 496, 516.)

Hunts reliance on Heck v. Humphrey (1994) 512 U.S. 477 is misplaced. In Heck v. Humphrey, the court held that an inmate cannot seek monetary damages under section 1983 for a claim based upon the unlawfulness of a criminal conviction without first setting aside the underlying conviction. (Id. at p. 483.) The court reiterated that in general there is no exhaustion requirement for bringing a section 1983 claim, but concluded nonetheless that section 1983 is not an appropriate vehicle for challenging the validity of an outstanding criminal judgment. (Id. at pp. 484-485.) The court explained that [u]nder our analysis the statute of limitations poses no difficulty while the state challenges are being pursued, since the [section] 1983 claim has not yet arisen. Just as a cause of action for malicious prosecution does not accrue until the criminal proceedings have terminated in the plaintiff's favor [citations], so also a [section] 1983 cause of action for damages attributable to an unconstitutional conviction or sentence does not accrue until the conviction or sentence has been invalidated. (Id. at pp. 489-490.) Subsequent cases have confirmed that this holding is limited to instances in which an inmate seeks damages under section 1983 based on a challenge to the validity of the underlying conviction. (Harden v. Pataki (11th Cir. 2003) 320 F.3d 1289, 1295; Ramirez v. Galaza (9th Cir. 2003) 334 F.3d 850, 858 [the favorable termination rule does not apply to  1983 suits challenging a disciplinary hearing or administrative sanction that does not affect the overall length of the prisoners confinement].) Hunts claims against the individual defendants are not collateral attacks upon the decision ultimately reached in the disciplinary proceedings. His claims against the individual defendants are for causing unreasonable delay and performing incompetently during the disciplinary proceedings, and for improperly authorizing payment to the ONR. The merit of these claims is not dependent on the outcome of the disciplinary proceedings. The claims are not analogous to the tort of malicious prosecution.

McMillan v. Goleta Water Dist. (9th Cir. 1986) 792 F.2d 1453 is similarly inapplicable. In that case, the court held that a claim under section 1983 based on the administrative taking of real property does not accrue until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue. (Id. at p. 1457; see also Norco Const., Inc. v. King County (9th Cir.1986) 801 F.2d 1143, 1145 [under federal law the general rule is that claims for inverse taking, and for alleged related injuries from denial of equal protection or denial of due process by unreasonable delay or failure to act under mandated time periods, are not matured claims until planning authorities and state review entities make a final determination on the status of the property].) In Coniston Corp. v. Village of Hoffman Estates (7th Cir. 1988) 844 F.2d 461, 463, the court explained, The taking is complete when it occurs, and the duty to pay just compensation arises then [citation], but the suit for just compensation is not ripe until it is apparent that the state does not intend to pay compensation. The rationale for this rule is that [i]f [the property owners] were to seek administrative relief under these procedures, a mutually acceptable solution might well be reached with regard to individual properties, thereby obviating any need to address the constitutional questions.  (McMillan v. Goleta Water Dist., supra, 792 F.2d at p. 1457.) While these cases might have some application to a claim by Hunt to recover the amount paid by the University to the ONR, they are of little relevance to Hunts claims against the individual defendants. The individual defendants are not alleged to have made an improper decision from which Hunt seeks relief. They are alleged to have violated Hunts civil rights during the protracted course of the disciplinary proceedings by engaging in certain conduct, the propriety of which is not dependent on the outcome of those proceedings.

Hunt contends that the limitation period on his claims was tolled while his March 2001 grievance was pending before the P&T Committee and while the related disciplinary proceedings against him were being resolved. The doctrine of equitable tolling focuses on the effect of the prior claim in warning the defendants in the subsequent claim of the need to prepare a defense. (Cervantes v. City of San Diego (9th Cir. 1993) 5 F.3d 1273, 1275 (Cervantes).) [I]n a [section] 1983 suit, state tolling rules, not federal ones, apply. (Roberts v. Barreras (10th Cir. 2007) 484 F.3d 1236. 1241.) Under California law, a plaintiff must meet three conditions to equitably toll a statute of limitations: (1) defendant must have had timely notice of the claim; (2) defendant must not be prejudiced by being required to defend the otherwise barred claim; and (3) plaintiffs conduct must have been reasonable and in good faith.  (Fink v. Shedler (9th Cir.1999) 192 F.3d 911, 916.) If applicable, the equitable tolling doctrine tolls the statute of limitations during the pendency of the initial proceedings, regardless of whether exhaustion is a prerequisite to filing suit. (Donoghue v. County of Orange (9th Cir. 1988) 848 F.2d 926, 930-931; Addison v. State of California (1978) 21 Cal.3d 313, 318.)

A plaintiff pursuing section 1983 claims may enjoy the benefit of equitable tolling while his claim is pending before an administrative agency if the section 1983 claims and the claims presented to the agency are predicated upon the same wrong and Californias three-prong test is satisfied. (Lucchesi v. Bar-O Boys Ranch (9th Cir. 2003) 353 F.3d 691, 696.) In Apple Valley Unified School Dist. v. Vavrinek, Trine, Day & Co. (2002) 98 Cal.App.4th 934, 954, the court explained, Equitable tolling typically applies where the plaintiff pursues an alternative remedy against the defendant in the second suit. . . . [] . . . [] The requirement that the alternative proceeding apprise the defendant of the nature of the claim and the plaintiffs intent to litigate has led several courts to conclude that, where the first proceeding does not seek relief against the defendant in the second proceeding, equitable tolling does not apply.

Initially, we note that as a general matter a disciplinary action brought by an entity against its employee does not constitute pursuit of a remedy in another forum. (Cervantes, supra, 5 F.3d at p. 1275.) In the disciplinary action in this case, Hunt defended himself against the charges brought by the University; he was not seeking a remedy. In any event, Hunts tolling argument fails because neither the pendency of the disciplinary proceedings nor Hunts challenge to the procedures being followed by the University gave notice to the individual defendants that Hunt would attempt to hold them personally liable for their role in the disciplinary proceedings.

While some decisions have applied equitable tolling against defendants who were not parties to the prior actions, the courts have done so for reasons that have no application in the present case. In Azer v. Connell (9th Cir. 2002) 306 F.3d 930, the court held that a prior suit against the State Controller in her official capacity put individual defendants who worked in the Office of the Controller on notice that they might be subject to suit as individuals. The court explained that the allegedly wrongful conduct was effected by individuals within the Office of the Controller, and [plaintiffs] suit challenged these actions as illegal. Thus, the suit should have served to notify those individuals responsible for the [conduct] that they might incur liability for their actions. (Id. at p. 937.) Similarly, in Cervantes, supra, 5 F.3d at page 1276, footnote 3, the court explained, Although generally the notice factor means that the defendant in the first claim is the same one being sued in the second, this is not an absolute requirement. [Citation.] . . . For example, here the district court noted that several of the defendants were not parties to Cervantes administrative proceedings. However, from the allegations of the complaint, it appears that these defendants, all but one of whom have close affiliations with the City, may well be in the kind of evidentiary privity as would justify overlooking their nominal absence from the Civil Service proceedings. Cervantes considered the issue on appeal from a judgment on the pleadings and concluded that the allegations of the complaint alone will not properly yield a conclusion that equitable tolling does not apply. (Id. at p. 1277.) The court observed that Californias fact-intensive test for equitable tolling is more appropriately applied at the summary judgment or trial stage of litigation. (Id. at p. 1276.)

Here, the court resolved the issue on a motion for summary adjudication, concluding that there is no evidence to support Hunts claim of equitable tolling. Unlike the circumstances in Azer v. Connell, supra, 306 F.3d at page 937, Hunt presented no evidence demonstrating that the individual defendants knew Hunt had filed a grievance, let alone that he might later seek to hold them personally liable for their roles in the investigation of his activities. Indeed, Cordon and LeFore were no longer working for the University when Hunt filed his grievance and Neff left shortly thereafter. Hunt contends that defendants cannot argue lack of notice after refusing to permit discovery into what counsel for the campus and the University told them by asserting attorney client privilege. The implication that because the individual defendants asserted the attorney-client privilege the court should presume they were given information that would satisfy the notice requirement is untenable. The assertion of the privilege gives rise to no such adverse inference. (Evid. Code,  913, subd. (1) [If in the instant proceeding or on a prior occasion a privilege is or was exercised . . . to refuse to disclose or to prevent another from disclosing any matter, neither the presiding officer nor counsel may comment thereon, no presumption shall arise because of the exercise of the privilege . . . .]; see also 2,022 Ranch v. Superior Court (2003) 113 Cal.App.4th 1377, 1388 [ Although exercise of the privilege may occasionally result in the suppression of relevant evidence, the Legislature of this state has determined that these concerns are outweighed by the importance of preserving confidentiality in the attorney-client relationship . . . . ].) The individual defendants having presented evidence that the statute of limitations had run by the passage of more than one year from the accrual of Hunts causes of action, it was Hunts burden to produce evidence that the statute had been tolled (see Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 651), which included evidence that the individual defendants received notice of Hunts potential claims against them. The trial court correctly concluded that Hunt failed to present such evidence.

Finally, contrary to Hunts assertion, there are no factual disputes as to the conduct of the individual defendants that preclude summary judgment. Hunts first cause of action under section 1983 seeks damages for causing unreasonable delay in the disciplinary proceedings and for the incompetent manner in which the audit was performed. He claims that defendants engaged in inordinate, unreasonable and unconscionable delays by failing to comply with timelines in the UCSF Procedure for Investigation of Faculty Conduct in that they waited almost a year to begin the internal audit and took two years to complete it. He also objects to allegedly unreasonable delays in the Ad Hoc Committees review of the audit and to the delay of almost one year in filing formal charges with the P&T Committee. The undisputed facts establish, however, that Hunt received a copy of the final audit no later than October 1998. According to the individual defendants undisputed facts, By May 1999, [Hunt] knew that the Ad Hoc Committee had completed its investigation and submitted a report because he received a copy of the report . . . . Formal charges were filed against Hunt with the P&T Committee in November 2000. Hence, the claim that there was unreasonable delay in the proceedings accrued well before 2002.

Hunt contends that his claims of incompetence did not accrue with the filing of the various reports because he did not know of the misconduct until much later. He argues that his claims against Condon and LeFore, who oversaw the audit, did not accrue in 1998 because the audit report did not inform Hunt that the auditors had failed to consult scientific experts, failed to review [scientific] manuscripts, conducted a seriously flawed audit, and lost or destroyed key evidence.  Likewise, Hunt argues that his claims against Wilson and Bainton did not accrue when he received the Ad Hoc Committee report in May 1999 because he did not learn that the scientific manuscripts had been withheld from the Ad Hoc Committee . . . until the P&T hearing and [h]e only learned through discovery that Wilson was responsible for withholding the scientific manuscripts. The undisputed evidence, however, is to the contrary. Hunts brief addressing the formal charges before the P&T Committee, dated October 26, 2001, show that Hunt knew of many if not all of the alleged flaws in the internal audit and subsequent review by the Ad Hoc Committee. Hunt acknowledges that at the P&T Committee hearing in July 2001 he learned that certain evidence was withheld from the Ad Hoc Committee. The fact that he did not learn until discovery in this case that Wilson was responsible for that omission did not preclude the claim from accruing. (Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 933).

Hunts second and third causes of action allege claims under section 1983 based on the repayment of the ONR grant funds. The undisputed facts establish that in response to a letter from Neff, dated December 1, 1999, Koda-Kimble transferred $182,500 from Hunts discretionary account to an escrow account and that in July 2000a portion of these funds was used to repay ONR. It is undisputed that Hunt was aware of the transferbecause he received a copy of Neffs letter in December 1999, that Hunt learned that the University had made payment to the ONR in July 2000 from his attorney, and that he received formal written notice of the payment from the University in October 2000. Hunt contends, essentially without elaboration, that the claims against Koda-Kimble, Neff, Bainton and Bishop did not accrue until P&T informed Hunt that his grievance did not state a prima facie case on December 18, 2002.[2] However, claims based on the transfer of funds to ONR accrued at the latest when Hunt learned of the repayment which, as he elsewhere acknowledges , was in July 2000. A final adjudication of his grievance was not necessary for the accrual of his cause of action nor was it a prerequisite to filing his claims. Nor were his claims equitably tolled while his grievance was pending because, among other things, there was no reason for the individual defendants to suspect they might be sued for their roles in the repayment.

Hence, the trial court properly granted defendants motion for summary adjudication of the section 1983 causes of action against the individual defendants based on the running of the statute of limitations.

2. Defamation

The trial court sustained without leave to amend the defendants demurrer to Hunts cause of action for defamation. On appeal, we exercise our independent judgment in determining whether the complaint states a cause of action. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.)

Defamation is an invasion of the interest in reputation. The tort involves the intentional publication of a statement of fact that is false, unprivileged, and has a natural tendency to injure or which causes special damage. [Citations.] Publication means communication to some third person who understands the defamatory meaning of the statement and its application to the person to whom reference is made. Publication need not be to the public at large; communication to a single individual is sufficient. (Smith v. Maldonado (1999) 72 Cal.App.4th 637, 645, fn. omitted.)

Hunts complaint alleges, When defendants repaid the $97,383 to the ONR, they knew or should have known that their actions and communications would be understood by ONR as an admission that Hunt had misappropriated federal funds, was guilty of scientific misconduct, and was guilty of defrauding the federal government. On appeal, Hunt argues that the check itself was a written communication sufficient to support his claim. Defendants contend, however, that neither the act of repaying the ONR nor the check constitutes a provably false statement of fact. We agree.

Whether published material is reasonably susceptible of an interpretation which implies a provably false assertion of factthe dispositive question in a defamation actionis a question of law for the court. (Couch v. San Juan Unified School Dist. (1995) 33 Cal.App.4th 1491, 1500.) The trial court here correctly determined that, even in the context of reimbursing the ONR for grant funds, the check is not reasonably susceptible of being interpreted to imply a provably false assertion of fact. (McGarry v. University of San Diego (2007) 154 Cal.App.4th 97, 116.) As Bainton explained in a letter submitted to the P&T Committee in opposition to Hunts grievance, the University made a good faith business decision to repay the ONR once the ONR became aware of the internal investigation and began placing pressure on the University to resolve the matter.[3] According to Bainton, The University, as a public institution, has a stewardship obligation to ensure that all financial transactions conform to legal requirements and to correct financial problems when they are identified. The decision to return $97,383 to the ONR was not disciplinary in nature, but rather a business decision made by University officials in a good faith effort to ensure that the University met its obligation to comply with federal agency guidelines based on the Audit report and the Ad Hoc Committee findings. The check did not expressly assert that Hunt had misused the ONR funds, nor did the act of repaying the funds reasonably imply that he had done so. There is no evidence of a transmittal letter explaining the reason for which the funds were being returned, and based on Baintons letter, the ONR was apparently informed that while the money was being returned, no final decision had been reached in the disciplinary proceedings.

Contrary to Hunts suggestion, the court did not abuse its discretion in denying him leave to amend. Hunt argues that he should have been permitted to conduct discovery into the existence of a transmittal letter or other communication in connection with the two checks, or to amend to allege on information and belief that such communications had taken place. However, Hunt presented no reason to believe that there were any such libelous communications. The trial court did not abuse its broad discretion in refusing to sanction a speculative hunt for a claim presumably arising in July 2000 and sustaining the demurrer without leave to amend.

II. The Regents Cross-appeal

On November 17, 2000, the P&T Committee received from the Chancellor a list of formal disciplinary charges against Hunt. The charges alleged, among other things, that Hunt failed to comply with University policy when he continued an unauthorized relationship [in the form of a] consulting agreement with Syntex after May 1993, which was after the Chancellors office voiced concerns with the Hunt-Syntex agreement. Pursuant to the Academic Senate bylaws applicable to disciplinary proceedings, the P&T Committee conducted an evidentiary hearing to evaluate the charges against Hunt. The P&T Committee considered stipulated facts, exhibits and live testimony presented by both the University and Hunt. The following stipulated facts were offered with respect to the Syntex charge:

1. In the fall of 1991, Syntex and Hunt proposed a collaborative research agreement on forecast software. This eventually became known as the Clinical Outcomes Forecasting Software (COFS). [] 2. On July 20, 1991, Dr. Leslie Z. Benet, Chair, Department of Pharmacy, informed the Patent Attorney Law Department of his understanding of the Hunt-Syntex proposal. [Citation.] [] 3. On April 13, 1992, Dr. Benet wrote to Associate Vice Chancellor Karl J. Hittleman requesting a 10% overhead rate for the Hunt-Syntex research arrangement. [Citation.] [] 4. On April 28, 1992, Senior Vice Chancellor David J. Ramsey notified Dr. Benet that he had approved the request for an exception to the standard overhead rate for the Hunt-Syntex contract. [Citation.] [] 5. On May 12, 1992, John Klimek wrote to Marguerite McIntyre (with cc to Hunt) with regard to the Hunt-Syntex Development Agreement. Klimek indicates that the 10% overhead request will go forward after Dr. Hunt provides documentation which [was] previously requested (Contracts and Grants Approval Form and Statement of Economic Interests) and when the terms of the agreement have been negotiated consistent with University policies. Klimek also identified potential problems, such as ownership of software assigned to Syntex and intellectual property rights issues. [Citation.] [] 6. All of the above referenced correspondence concerns a collaborative research agreement between UCSF and Syntex, which Hunt proposed. Syntex and UCSF did not enter into this research agreement. [] 7. On June 30, 1992, Hunt signed a Consulting Agreement with Syntex wherein Syntex would fund Hunt for the development of the COFS Software. [Citation.] [] . . . [] 10. The Consulting Agreement ended in the summer of 1995 when Roche acquired Syntex.

Dr. Benet testified that after reading the May 1992 letter from Klimek, he believed that the development agreement between the University and Syntex would be approved with the reduced overhead once issues regarding ownership and intellectual property rights had been resolved. He did not hear anything further about the agreement and [a]t that time [he] thought it had gone forward. He learned during the auditors investigation that a contract between the University and Syntex was never executed and that, instead, in June 1992 Hunt and Syntex had entered into a separate consulting agreement. When Benet ultimately learned of the consulting agreement he felt that it went around what was the agreement that we would expect from a faculty member having [an] agreement with . . . an outside University agency.[4]

Hunt testified that Syntex chose not to enter the development agreement with the University because it did not have sufficient funds to support the project as initially proposed. Syntex was interested in pursuing the software if we could find an avenue to pursue it. Syntex suggested that they do so as part of a consulting agreement with Hunt. Hunt testified that he entered into the consulting agreement with the hope that there would be funds there for [his] personal income, but [his] expectation . . . was that [he] would take these funds and . . . would use it to support the research. If there was something left over, maybe [he] could use that as personal income. Hunt hoped that Syntex would be able to fund the development agreement with the University the following year but it was unable to do so. In addition, Syntex became more concerned about the fact that the University was unwilling to recognize their contribution to the project as influencing how intellectual property rights might be divided. When asked whether there was a reason he did not discuss the consulting agreement with Benet, Hunt testified he thought Benet was aware of the agreement because [Benet] knew that was where part of [his researchers] funding was coming from and [e]ach year [Hunt] provided the department with an update of [his] research activity on which he listed his collaboration with Syntex. Hunt thought Benet knew the relationship was ongoing but he acknowledged that Benet had not asked him about the details of the arrangement.

The P&T Committee upheld the Syntex charge, finding that Hunt violated Section I of the Faculty Code of Conduct by failing to comply with University Policy regarding faculty relationships with outside entities. The P&T Committee explained that the purpose of the Hunt-Syntex agreement was to facilitate the development of the COFS, which was the same purpose at the heart of the Development Agreement that Professor Hunt and Syntex proposed to the University in 1991. That proposal was not approved by the University in part because of potential problems with ownership of software and intellectual property rights. In short, Professor Hunt entered into an unauthorized relationship with Syntex, thus circumventing the Universitys concerns. In doing so, he placed himself in a position to financially benefit from the arrangements (i.e., royalties) if the research resulted in a marketable and profitable product.

Hunts petition for a writ of mandate under Code of Civil Procedure section 1094.5 alleges that Hunt was prejudiced by unreasonable delays in the disciplinary proceedings and that the findings of the P&T Committee are not supported by substantial evidence. At the hearing on the petition, Hunt also asserted that the disciplinary hearings were fundamentally unfair because he was not given adequate notice of the charges against him. The trial court accepted each of Hunts arguments.

The courts finding that Hunt was deprived of a fair hearing is evaluated under a mixed standard of review. To the extent the trial courts determination is based on disputed facts, we review the record in the light most favorable to the ruling below and affirm all findings that are supported by substantial evidence. (Nightlife Partners, Ltd. v. City of Beverly Hills (2003) 108 Cal.App.4th 81, 87.) We then apply a de novo standard to determine whether, under the facts so found, the hearing in question was fair. (Ibid.) Because the court concluded as a matter of law that the Syntex charge is barred by the doctrine of laches, we apply a de novo standard of review in analyzing that claim as well. (Fountain Valley Regional Hospital & Medical Center v. Bont (1999) 75 Cal.App.4th 316, 323.) Finally, with regard to the trial courts conclusion that the record does not support the findings of the P&T Committee, we independently  review the administrative record to determine whether the trial courts findings are supported by substantial evidence in light of the whole record, our object being to ascertain whether the trial court ruled correctly as a matter of law. [Citations.] The appellate court thus does not review the actions or reasoning of the superior court, but rather conducts its own review of the administrative proceedings to determine whether the superior court ruled correctly as a matter of law. (Hongsathavij v. Queen of Angels etc. Medical Center (1998) 62 Cal.App.4th 1123, 1136-1137.)

Looking first at the fairness of the proceedings, the trial court found that Hunt was deprived of a fair hearing because he was charged with continuing an unauthorized relationship with Syntex after May 1993, but disciplined based on his initial entry into that relationship in June 1992. Administrative proceedings, however, are not bound by strict rules of pleading. (Stearns v. Fair Employment Practice Com. (1971) 6 Cal.3d 205, 213.) So long as the respondent is informed of the substance of the charge and afforded the basic, appropriate elements of procedural due process, he cannot complain of a variance between administrative pleadings and proof. (Ibid.) Moreover,  [a] variance between the allegations of a pleading and the proof will not be deemed material unless it has actually misled the adverse party to his prejudice in maintaining his action or defense on the merits . . . .  (Cooper v. Board of Medical Examiners (1975) 49 Cal.App.3d 931, 942.)

Contrary to Hunts assertion, it is clear from the record that he was not prejudiced by any variance from the pleaded charges. Following the P&T Committee hearing, Hunt submitted a 44 page brief outlining the evidence presented by the University at the hearing and explaining why that evidence did not support the charges against him. He explained, As to the charge that Hunt continued an unauthorized relationship consulting agreement (sic) with Syntex after May 1993, which was after the Chancellors Office voiced concerns with the Hunt-Syntex agreement, the evidence shows that the auditors and the Ad Hoc committee confused a Consultant Agreement between Hunt and Syntex with a proposed research agreement that was never consummated. There is undisputed evidence that the letter relied upon to make this charge was in fact never sent. Although Hunt continued a relationship with Syntex until the company was acquired by Roche in 1995, the campus presented no evidence that it was an unauthorized relationship. Following the final decision by the P&T Committee, Hunt submitted a comprehensive letter again challenging the evidence in support of the committees findings and requesting reconsideration of the final determination. Hunt was given adequate notice of the nature of the Syntex charge and ample opportunity to rebut the charge. He was not prejudiced by any variance between the formal charge and the P&T Committees final decision.

The trial court also erred in concluding that the University was barred by laches from disciplining Hunt for the unauthorized relationship with Syntex. The doctrine of laches bars a cause of action when the plaintiff unreasonably delays in asserting or diligently pursuing the cause and the plaintiff has acquiesced in the act about which the plaintiff complains, or the delay has prejudiced defendant. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 77.) Delay alone ordinarily does not constitute laches, as lapse of time is separately embodied in statutes of limitation. [Citation.] What makes the delay unreasonable in cases of laches is that it results in prejudice. (Lam v. Bureau of Security & Investigative Services (1995) 34 Cal.App.4th 29, 36.) The equitable doctrine of laches is  designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.  (Wood v. Elling Corp. (1977) 20 Cal.3d 353, 362.) [T]he element of prejudice may be presumed if there exists a statute of limitations which is sufficiently analogous to the facts of the case, and the period of such statute of limitations has been exceeded by the public administrative agency in making its claim. In the second situation, the limitations period is borrowed from the analogous statute, and the burden of proof shifts to the administrative agency. To defeat a finding of laches, the agency . . . must then (1) show that the delay involved in the case . . . was excusable, and (2) rebut the presumption that such delay resulted in prejudice to the opposing party. [Citations.] [] Thus, [i]n cases in which no statute of limitations directly applies [such as administrative proceedings] but there is a statute of limitations governing an analogous action at law, the period may be borrowed as a measure of the outer limit of reasonable delay in determining laches.  (Fountain Valley Regional Hospital & Medical Center v. Bont, supra, 75 Cal.App.4th at p. 324, fn. omitted; Brown v. State Personnel Bd. (1985) 166 Cal.App.3d 1151, 1160.)

Here, the court concluded under the authority of Brown v. State Personnel Bd., supra, 166 Cal.App.3d at page 1160, that as a matter of law the Syntex charge was barred by the doctrine of laches. The trial court reasoned that the University exceeded the analogous three-year limitations period by waiting more than four years after the auditors learned of the consulting agreement to initiate disciplinary proceedings against Hunt. Although the auditors learned of the consulting agreement with Syntex in December 1996, disciplinary proceedings were not initiated, according to the trial court, until the Chancellor filed charges with the P&T Committee in November 2000. Contrary to the trial courts premise, however, disciplinary proceedings were initiated long before charges were filed with the P&T Committee; the process began in May 1998 when the Chancellor created an Ad Hoc Committee to conduct a formal investigation. (See, e.g., id. at pp. 1157, 1162 [disciplinary proceedings initiated when university commenced an investigation].) Indeed, Hunt acknowledges that under the Universitys Procedures for Investigating Faculty Misconduct, disciplinary proceedings begin with a preliminary and then a formal investigation prior to filing formal charges before the P&T .

The record establishes that soon after the auditors issued a report in April 1998 describing Hunts improper relationship with Syntex, the matter was referred to the Chancellor, who in May 1998 appointed the Ad Hoc Committee to conduct a formal investigation of the charges. Notice of the initiation of the formal investigation was given to Hunt. He participated actively in the investigation by the Ad Hoc Committee (as he had in the audit) and he had ample knowledge of the charges being asserted against him. The present case is not at all similar to the situation in Brown v. State Personnel Bd., supra, 166 Cal.App.3d at pages 1156-1157, where the investigation was not commenced until four years after the university learned of the alleged misconduct. This is not a case where an employee has been surprised by the   revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.   (Id. at p. 1161.)

Finally, the trial court also concluded that the P&T Committees findings were not supported by the record. The court explained, The Committee on Privilege and Tenure made three significant findings with respect to Charge No. 3: (1) The Development Agreement was not approved by the University in part because of potential problems with ownership of software and intellectual property rights. (2) Hunt was informed of potential problems with the proposed Development Agreement, such as ownership of software assigned to Syntex and intellectual property rights issues. And (3) Professor Hunt entered into an unauthorized relationship with Syntex, thus circumventing the Universitys concerns and thereby placed himself in a position to financially benefit from the arrangement (i.e., royalties) if the research resulted in a marketable and profitable product.  The trial court found no evidentiary support in the record for any of these findings.

The trial court stated that the University had made no effort to defend the first finding and, thus, concluded that the University conceded that there is no evidence to support it. The court concluded that the only evidence in the record with respect to the second finding, that Hunt was informed of potential problems with the development agreement, was John Klimeks May 1992 letter. This letter, according to the court, was never authenticated in that respondents never showed that it was a final letter that was in fact sent by Klimek to McIntyre and was also uncorroborated hearsay. The court explained that the last finding can be supported (if at all) only by an inference drawn from surrounding circumstances and the inference can be drawn onlyif Hunt was informed of the potential problems with the proposed Development Agreement.   These conclusions, however, are both inconsistent with the stipulated facts submitted to the P&T Committee and at odds with Hunts own testimony at the hearing.

Stipulated fact number 5 states that Klimeks letter, in which he expressed his concerns about the intellectual property rights, was sent to the Dean and copied to Hunt. A copy of the letter with a stamp indicating it was received by the Deans Office is attached as an exhibit in the administrative record. Hunt does not deny that he received the letter. To the contrary, his testimony indicates that both he and Syntex were aware of the Universitys concerns regarding the development agreement. Hunts suggestion that Benet testified the letter was never mailed is misleading. Benet testified, This letter was not sent, but the Dean copied it to me as you can see up on the right-hand corner, so it was sent to me. Benets subsequent testimony clarifies that while he wasnt directly copied [on the letter], he did receive it after it was forwarded to him by the Dean. Accordingly, the evidence supports the conclusion that the University voiced its concerns about the development agreement and that Hunt was aware of those concerns.

The record also supports the P&T Committees finding that Hunt entered into an unauthorized relationship with Syntex, thus circumventing the Universitys concerns. Hunts defense to this allegation was that Benet was aware of his consulting agreement with Syntex so that the agreement was not unauthorized. Benets testimony, however, was that he was not aware that Hunt had entered into a separate consulting agreement until after he read the auditors report. As noted above, Hunts suggestion that this testimony was thoroughly impeached by Benets prior testimony before the Ad Hoc Committee relies on a misinterpretation of the prior testimony.(See fn. 5, ante.) The fact that Benet knew that Syntex funds were being used to compensate other researchers in Hunts laboratory and that the software project was listed on Hunts annual review of his work does not necessarily mean that Benet was aware that Hunt had entered into a separate consulting agreement with Syntex. Rather, it is consistent with Benets testimony that at the time he believed that the development agreement between the University and Syntex had gone forward.

Thus, our review of the record discloses substantial evidence to support the Universitys findings. Therefore, there was no basis for issuing the writ of mandate, and the writ must be set aside.

Disposition

The portion of the judgment granting Hunts petition for a writ of mandate is reversed. The judgment of the trial court is affirmed in all other respects. The University shall recover its costs on appeal.

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Pollak, Acting P. J.

We concur:

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Siggins, J.

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Horner, J.*

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[1] The trial court also concluded that there are additional grounds for granting the individual defendants summary adjudication of Hunts section 1983 claims. In light of our conclusion that the claims are barred by the statute of limitations, we need not consider Hunts challenges to these alternative grounds.

[2] Implicit in this argument is an acknowledgement that the second and third causes of action are not properly asserted against the remaining individual defendants, who apparently had nothing to do with the repayment of the ONR funds.

[3] In August 1999 the campus received a telephone call from an officer of the ONR who stated that the whistleblower had contacted the ONR directly and the agency was now requesting a copy of the Universitys report of the internal investigation. University counsel explained that the Universitys position was that the reports were private and confidential and would not be released until the completion of the disciplinary proceeding. The University agreed to update the ONR on the case, but was careful to state that the results were preliminary and subject to further findings of the Universitys [P&T] Committee. The Audit Report was not sent to the ONR despite several requests. The University was subsequently served a subpoena duces tecum on June 1, 2000 requiring the University to provide any and all records of the audit investigation, the Ad Hoc Committee investigation, and all documents considered by the committee and the Chancellor. The University complied with the request for documents.

[4] Hunts attempt to impeach Benets testimony that he was unaware of the consulting agreement prior to the audit relies on a misreading of Benets prior testimony before the Ad Hoc Committee. When read in context, there is no doubt that when Benet testified he was aware of the first year of the consulting agreement between Hunt and Syntex, he was referring to the proposed development agreement and not to the actual consulting agreement that Hunt entered with Syntex.

* Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.