Becket v. Welton Becket & Associates

• Decision Date: 14 June 1974
• Citation: 39 Cal.App.3d 815,114 Cal.Rptr. 531
• Court: California Court of Appeals Court of Appeals
• Parties: , 115 L.R.R.M. (BNA) 4649 Bruce D. BECKET, Plaintiff and Appellant, v. WELTON BECKET & ASSOCIATES, a California corporation, et al., Defendants and Respondents. Civ. 42719.

Page 531

114 Cal.Rptr. 531

39 Cal.App.3d 815, 115 L.R.R.M. (BNA) 4649

Bruce D. BECKET, Plaintiff and Appellant, v. WELTON BECKET & ASSOCIATES, a California corporation, et al., Defendants and Respondents.

Civ. 42719.

Court of Appeal, Second District, Division 2, California.

June 14, 1974.

Rehearing Denied July 11, 1974.

Hearing Denied Aug. 7, 1974.

Hill, Farrer & Burrill, William S. Scully, Jr., Marvin E. Garrett, M. Richardson Lynn, Jr., Los Angeles, for plaintiff and appellant.

Latham & Watkins, John S. Welch, John R. Light, William J. Meeske, Los Angeles, for defendants and respondents.

COMPTON, Associate Justice.

Plaintiff Bruce D. Becket appeals from an order of the superior court dismissing his complaint following the sustaining of a demurrer without leave to amend.

From the allegations of the complaint we glean the following background.

Plaintiff is the son of Welton Becket, now deceased, the owner of all the outstanding shares of stock in Welton Becket & Associates, a corporate architectural firm. Upon the death of Welton Becket, plaintiff was appointed co-executor of the estate and became a member of the board of directors of the corporation succeeding his father. He is also the single largest legatee of the stock according to the provisions of the last will and testament of Welton Becket.

Defendant MacDonald Becket is the president and chief executive officer of Welton Becket & Associates. He is also a member of the board of directors. Defendants McReynolds and Grossman are members of the board of directors.

For many years prior to his father's death in 1969, plaintiff was employed by Welton Becket & Associates as an architect. In 1970, he assumed the job of project architect with coordinating responsibilities for the administration of architectural work and contracts.

In January of 1973, plaintiff in his capacity as co-executor of the estate of Welton Becket filed an action in the Superior Court of Los Angeles County naming as defendants Security Pacific National Bank, the co-executor, MacDonald Becket, Albert Grossman and Charles McReynolds. The complaint in that case alleged among other things breach of fiduciary duties, corporate waste and improper usurpation of corporate control. The relief sought was injunctive and declaratory in nature as well as damages. Following service of summons and complaint in that action defendant MacDonald Becket advised the plaintiff that unless he ceased and desisted from the prosecution of such action he would be discharged from his employment with Welton Becket & Associates.

Plaintiff in this action has captioned his complaint as one for injunctive relief and damages for breach of contract, intentional interference with contractual relations, and intentional interference with his pursuit of his livelihood.

Although the complaint purports to state several causes of action the pleaded operative facts point to a single cause of action based upon a number of legal theories and seeking a number of different remedies. (See Peiser v. Mettler, 50 Cal.2d 594, 328 P.2d 953; Marden v. Bailard, 124 Cal.App.2d 458, 268 P.2d 809; Wulfjen v. Dolton, 24 Cal.2d 891, 151 P.2d 846.) The issue is whether the pleaded facts show the existence of a right in the plaintiff, a corresponding duty on the part of the defendant, and a wrong or delict on behalf of the defendant. (Kaufman & Broad Bldg. Co. v. City & Suburban Mortg. Co., 10 Cal.App.3d 206, 88 Cal.Rptr. 858; Eichler Homes of San Mateo Inc. v. Superior Court, 55 Cal.2d 845, 13 Cal.Rptr. 194, 361 P.2d 914; Hilltop Properties v. State of California, 233 Cal.App.2d 349, 43 Cal.Rptr. 605.)

Plaintiff alleges that the wrong of which the defendants were guilty is the act of threatening to discharge him. Whether that act is in fact a wrong depends on whether plaintiff had a right not to be discharged and the defendants a corollary duty not to discharge him. If the right and the duty exists then the damages and various forms of relief which plaintiff seeks would flow therefrom. The answer to these questions turns on the single issue of the defendants' authority to discharge the plaintiff under the circumstances as alleged. Plaintiff concedes the existence of the authority generally but contends that in the instant case the manner in which it was exercised violated 'public policy.'

By paraphrasing the key allegations we outline plaintiff's case as follows: The contract between plaintiff and Welton Becket & Associates is an oral employment contract of indefinite duration which ordinarily would be terminable at the will of either party; MacDonald Becket, as president, and Albert Grossman and Charles B. McReynolds, as directors of the corporation, conspired together to effect the discharge of plaintiff in retaliation for his instituting litigation against the corporation and themselves and to coerce plaintiff into dismissing the action; as a result of this conspiracy, Grossman and McReynolds authorized MacDonald Becket to discharge plaintiff; MacDonald Becket in threatening to discharge plaintiff breached the employment contract on behalf of the corporation; such action constituted a breach and was wrongful for the reason that the threatened discharge violated public policy; because the threatened discharge was wrongful and against public policy it was beyond the scope of MacDonald Becket's authority as president of the corporation; and finally in discharging plaintiff, defendants would wrongfully prevent plaintiff from pursuing his profession during the pendency of the litigation.

We first dispose of a theory advanced by plaintiff here which was not advanced in the court below. Plaintiff would create the right and the duty by characterizing his employment as an 'agency coupled with an interest'.

If an agency or power is created for the benefit of the agent in order to protect some title or right in the agent or to secure performance to him, the agent and not the principal is the one most concerned with the agency and it is no longer then within the power of the principal to terminate that agency at will. (1 Witkin, Summary of California Law, Agency and Employment (8th ed.) § 226, p. 814; Jay v. Dollarhide, 3 Cal.App.3d 1001, 84 Cal.Rptr. 538; Civ.Code, § 2356.)

The Restatement of Agency, § 138, p. 339, sets forth the requirements for the creation of an agency or power coupled with an interest. They are (1) that the agency be held for the benefit of the agent not the principal, (2) that the agency is created to secure the performance of a duty to the agent or to protect a title in the agent, and (3) that the agency is created at the same time that the duty or title is created or is created for consideration.

The complaint fails to allege facts which meet these requirements either as to time or purpose. Plaintiff's employment with Welton Becket & Associates was not provided to him as a vehicle for protecting any interest he had in the company. At the time of his employment he had no ownership interest in the company. That interest has only arisen upon the death of his father. Plaintiff has not alleged the existence of any interest other than his stock ownership which might be protected by his employment. His employment with the company as an architect does not serve to protect his interest in the stock of the company. At least plaintiff has alleged no facts which would indicate such to be the case.

Thus we are concerned here with a simple 'at will' employment contract. 'An employment, having no specified term, may be terminated at the will of either party . . ..' (Lab.Code, § 2922.) Such termination may be with or without cause and the motive of the employer is generally immaterial. (Marin v. Jacuzzi, 224 Cal.App.2d 549, 36 Cal.Rptr. 880; Mallard v. Boring, 182 Cal.App.2d 390, 6 Cal.Rptr. 171.)

However plaintiff notes, and it is true, that the courts have created certain limitations on the plenary power of an employer to discharge under an 'at will contract' where that discharge is in retaliation for actions of the employee which are protected by 'public policy.'

In Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 344 P.2d 25, it was held that a discharge was wrongful when it was based upon the employee's refusal to commit perjury as requested by the employer. The court recognized that the fact that perjury is a criminal offense is evidence of a strong public policy and that discharge under these circumstances violated that public policy. The act of the employer in attempting to suborn perjury was itself a criminal act.

In Glenn v. Clearman's Golden Cock Inn, 192 Cal.App.2d 793, 13 Cal.Rptr. 769, the motivation for the discharge was retaliation for the plaintiff-employee engaging in union...