Beals v. Kiewit Pacific Co., Inc.

• Decision Date: 28 June 1993
• Docket Number: Civ. No. 91-00471 DAE.
• Parties: Brent BEALS, Plaintiff, v. KIEWIT PACIFIC COMPANY, INC., Defendant.
• Court: U.S. District Court — District of Hawaii

825 F. Supp. 926

Brent BEALS, Plaintiff, v. KIEWIT PACIFIC COMPANY, INC., Defendant.

Civ. No. 91-00471 DAE.

United States District Court, D. Hawaii.

June 28, 1993.

Lunsford D. Phillips, Honolulu, HI, for plaintiff.

Dale W. Lee, David L. Monroy, Lex R. Smith, Ernest H. Nomura, Kobayashi Sugita & Goda, Barry W. Marr, David P. Ledger, Carlsmith Ball Wichman Murray Case Mukai & Ichiki, Honolulu, HI, for defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON COUNT III OF THE COMPLAINT AND DENYING DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION FOR PARTIAL SUMMARY JUDGMENT ON COUNTS IV AND V OF THE COMPLAINT

DAVID ALAN EZRA, District Judge.

This matter comes before the court on defendant's consolidated motions for summary judgment. The court heard argument on the motions on June 22, 1993. Lunsford D. Phillips, Esq., appeared on behalf of plaintiff; Ernest Nomura, Esq., appeared on behalf of defendant. After reviewing the motion and the supporting and opposing memoranda, the court grants defendant's motion on Count III and denies defendant's motion on Counts IV and V.

BACKGROUND

Plaintiff Brent Beals filed this action alleging breach of an employment contract with defendant Kiewit Pacific Company, Inc. ("Kiewit"). Viewed in the light most favorable to Beals, the facts leading up to the complaint are as follows. Beals had been employed as a concrete boom pump operator in California since 1985. In 1990, Beals was employed by Merli Concrete Pumping Company ("Merli") in San Marcos, California, where he would have remained until March 31, 1993. See Plaintiff's Memorandum in Opposition, Ex. F. During September 1990, Beals was assigned by Merli to operate a concrete pump for Kiewit Construction Company, Inc. (a sister company of defendant Kiewit Pacific Company, Inc.) for "a few months."

While working at the Kiewit Construction site, Beals met Mr. Stuart Stevens, a foreman for Kiewit Construction, and Mr. Paul Edstrom, a superintendent for Kiewit Construction. In January 1991, both Stevens and Edstrom informed Beals they were moving to Hawaii to work on separate projects for Kiewit Pacific and would see what they could do to get Beals a job there. In late January and early February, 1991, Beals began negotiating with Stevens regarding potential employment at an airport construction project in Honolulu, and with Edstrom regarding potential employment at an airport construction project on Maui. These negotiations took place by phone between Hawaii and California.

In mid-February 1991, on the last day of Beals' assignment at the Kiewit Construction site, Stevens telephoned Beals and offered him employment on the Honolulu project. Stevens offered Beals a number of incentives to accept the Honolulu job rather than the Maui job. According to Beals, one of the primary inducements to accept the Honolulu offer was a promise of employment for at least two years. That same day, Beals received a facsimile document from Kiewit, referred to herein as the "move letter," which outlined the terms and conditions of Beals' employment. The move letter stated, among other relevant terms: "We desire your commitment to work on this project for the duration or until other Kiewit projects require/desire your expertise." Plaintiff's Memorandum in Opposition, Ex. B. Beals signed and returned the move letter to Kiewit on February 13, 1991 (that same day), and reported for work in Honolulu on February 21, 1991.

On July 26, 1991, just over five months after Beals arrived in Honolulu, Kiewit terminated Beals' employment due to "lack of work." Although Beals alleges that Kiewit lied about the reason for his termination, that disputed fact is not material to the resolution of the instant motions. Beals has not worked for defendant since July 26, 1991.

On August 21, 1991, Beals commenced this action alleging breach of his employment contract by Kiewit. In his second amended complaint, Beals added four more counts to his complaint for negligent misrepresentation, bad faith termination (Count III), and two counts of violating California Labor Code § 970 (Counts IV and V). Beals subsequently filed a third amended complaint, where he restated his bad faith termination claim as one for "tortious breach of contract." All other allegations remain substantively the same.

Kiewit filed a motion for partial summary judgment on Count III arguing that Hawaii does not recognize a bad faith termination or tortious breach of employment contract cause of action. Kiewit also filed a motion to dismiss or, in the alternative, for summary judgment on Counts IV and V arguing that under established choice of law doctrine, Beals cannot assert his California Labor Code claim in a United States District Court sitting in Hawaii. The motions were consolidated for hearing.

STANDARD OF REVIEW

A motion to dismiss will be granted where the plaintiff fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A complaint should not be dismissed unless it appears to a certainty that plaintiff can prove no set of facts which would entitle the plaintiff to relief. Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 1832, 104 L.Ed.2d 338 (1989); Fidelity Fin. Corp. v. Federal Home Loan Bank, 792 F.2d 1432, 1435 (9th Cir.1986), cert. denied, 479 U.S. 1064, 107 S.Ct. 949, 93 L.Ed.2d 998 (1987); Stender v. Lucky Stores, Inc., 766 F.Supp. 830, 831 (N.D.Cal.1991). All allegations of material fact are taken as true and construed in the light most favorable to the plaintiff. Stender, 766 F.Supp. at 831.

To the extent, however, that "matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment." Fed.R.Civ.P. 12(b). Rule 56(c) provides that summary judgment shall be entered when:

The pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.

Fed.R.Civ.P. 56(c). The moving party has the initial burden of demonstrating for the court that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)). However, the moving party need not produce evidence negating the existence of an element for which the opposing party will bear the burden of proof at trial. Id. 477 U.S. at 322, 106 S.Ct. at 2552.

Once the movant has met its burden, the opposing party has the affirmative burden of coming forward with specific facts evidencing a need for trial. Fed.R.Civ.P. 56(e). The opposing party cannot stand on its pleadings, nor simply assert that it will be able to discredit the movant's evidence at trial. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987); Fed.R.Civ.P. 56(e). There is no genuine issue of fact "where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986) (citation omitted).

At the summary judgment stage, this court may not make credibility determinations or weigh conflicting evidence. Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir.1990). The standard for determining a motion for summary judgment is the same standard used to determine a motion for directed verdict: does the evidence present a sufficient disagreement to require submission to a jury or is it so one-sided that one party must prevail as a matter of law? Id. (citation omitted).

Because the court has considered materials outside the pleadings, it will treat both motions as motions for summary judgment.

DISCUSSION

I. BAD FAITH TERMINATION

In his second amended complaint, Beals alleged "bad faith termination" as Count III arguing that Kiewit is liable for the way in which it terminated him. Kiewit moved for summary judgment on the ground that Hawaii does not recognize a claim for "bad faith termination." Acknowledging Kiewit's objection, Beals amended his complaint, renaming Count III as a "tortious breach of contract" claim, but otherwise keeping the count substantively identical.

Assuming for purposes of this discussion that Kiewit's move letter constitutes an employment contract, it is irrelevant whether Beals labels the third count "bad faith termination" or "tortious breach of contract." Regardless of the label, Beals is trying to hold Kiewit liable for the way in which it terminated him. On this point, Hawaii law is clear. Employers are not liable for the manner in which they terminate employees because Hawaii is reluctant to subject each employment contract to judicial review for the "amorphous concept of bad faith." Parnar v. American Hotels, Inc., 65 Haw. 370, 377, 652 P.2d 625, 629 (1982).¹

Beals attempts to distinguish Parnar on the ground that Parnar involved an at-will employee attempting to enforce a contractual duty of good faith, but here Beals is alleging Kiewit breached its duty to "refrain from intentionally injuring another contracting party by the means of breaching a contract." See Resco, Inc. v. Founders Title Groups, Inc., 751 F.Supp. 1442 (D.Haw.1990).

Although Hawaii does recognize a tortious breach of contract cause of action, the Hawaii courts have not addressed whether they would adapt this cause of action to the employment context.² Resco itself not only involved a sales contract, it expressly distinguished Parnar on the basis that Parnar involved an employment contract. The court stated: "In Parnar, the Hawaii Supreme Court refused to adopt a rule that an employer has an implied duty to terminate an employee in good faith." Resco, 751 F.Supp. at 1444 (emphasis in original).

Although Beals argues that Parnar...