Gould v. Maryland Sound Industries, Inc., B081797

• Decision Date: 25 January 1995
• Docket Number: No. B081797,B081797
• Citation: 31 Cal.App.4th 1137,37 Cal.Rptr.2d 718
• Court: California Court of Appeals Court of Appeals
• Parties: , 133 Lab.Cas. P 58,250, 10 IER Cases 405 Tony S. GOULD, Plaintiff and Appellant, v. MARYLAND SOUND INDUSTRIES, INC., et al., Defendants and Respondents.

Page 718

37 Cal.Rptr.2d 718

31 Cal.App.4th 1137, 133 Lab.Cas. P 58,250, 10 IER Cases 405

Tony S. GOULD, Plaintiff and Appellant, v. MARYLAND SOUND INDUSTRIES, INC., et al., Defendants and Respondents.

No. B081797.

Court of Appeal, Second District, Division 7, California.

Jan. 25, 1995.

As Modified Feb. 9, 1995.

Review Denied May 11, 1995.

[31 Cal.App.4th 1143] William D. Evans, Pasadena, for plaintiff and appellant.

John H. Lavely, Jr., and Bonnie J. Chermak, Los Angeles, for defendants and respondents.

JOHNSON, Associate Justice.

Plaintiff Gould brought this action against his former employer and two management-level employees after he was terminated as a sales representative. The trial court sustained demurrers to each cause of action and dismissed the complaint. We have concluded some of Gould's allegations state causes of action while some do not. Therefore we reverse the judgment of dismissal and remand the case with directions.

FACTS AND PROCEEDINGS BELOW

In the discussion below we detail the facts alleged in Gould's complaint. In summary, he alleges Maryland Sound Industries (MSI) discharged him from his employment as a sales representative in order to avoid paying him the commissions due to him and in retaliation for his informing MSI management the company was not paying overtime wages due certain of its employees. Gould also claims there was an oral understanding between him and MSI he would not be discharged except for cause and MSI breached this agreement and the covenant of good faith and fair dealing by terminating his employment for the reasons stated above. According to the complaint MSI has refused to pay Gould the commissions, other wages, and vacation pay he earned prior to his discharge. Finally, Gould alleges he was defamed by statements made by MSI supervisors who accused him of poor job performance and, specifically, making a $100,000 error in an MSI contract bid.

Gould brought this action against MSI and two of its managerial employees for wrongful discharge in violation of public policy, breach of implied-in-fact contract, breach of the implied covenant of good faith and fair dealing, defamation, unpaid compensation and prima facie tort. The trial court sustained defendants' demurrers to each cause of action without leave to amend and entered a judgment of dismissal. Gould appeals from the judgment.

DISCUSSION

I. THE TRIAL COURT ERRED IN TAKING JUDICIAL NOTICE OF THE EXISTENCE OF A WRITTEN EMPLOYMENT CONTRACT BETWEEN GOULD AND MSI.

Gould's contract claims against MSI are based on allegations he was employed under an oral contract governed by California law. In its demurrer, MSI requested the trial court to take judicial notice Gould was employed under a written at-will contract governed by Maryland law. MSI attached a copy of the purported contract to its points and authorities. At the hearing on the demurrer Gould contended the document was an offer to be employed by MSI which MSI never accepted. He also argued the trial court could not take judicial notice of the purported contract at the demurrer stage to contradict the allegations in his complaint.

The trial court granted MSI's request and took judicial notice Gould was employed under the written contract submitted by MSI. Because several of MSI's challenges to the sufficiency of Gould's complaint are based on the existence of this purported written contract, we must determine whether the trial court properly took judicial notice of its existence at the demurrer stage.

It is "black-letter law" a demurrer tests the pleading alone. (5 Witkin, Cal.Procedure (3d ed. 1985) Pleading, § 895, p. 334.) "When any ground for objection to a complaint or cross-complaint does not appear on the face of the pleading, the objection may be taken by answer." (Code Civ.Proc., § 430.30(b).) "[D]efendants cannot set forth allegations of fact in their demurrers which, if true, would defeat plaintiff's complaint." (Fuhrman v. California Satellite Systems (1986) 179 Cal.App.3d 408, 422-423, 231 Cal.Rptr. 113.)

MSI attempts to rely on an exception to this "black-letter law" for matters which the court is required to or may judicially notice. Code of Civil Procedure section 430.30, subdivision (a) provides, "When any ground for objection to the complaint ... appears from the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading."

Here, MSI requested the trial court to take judicial notice of the existence of a written contract of employment between it and Gould based on Evidence Code section 452, subdivision (h) which permits the court to take judicial notice of "[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy." For the reasons set forth below, we hold the existence of a contract between private parties cannot be established by judicial notice under Evidence Code section 452, subdivision (h). ¹

Judicial notice under Evidence Code section 452, subdivision (h) is intended to cover facts which are not reasonably subject to dispute and are easily verified. These include, for example, facts which are widely accepted as established by experts and specialists in the natural, physical, and social sciences which can be verified by reference to treatises, encyclopedias, almanacs and the like or by persons learned in the subject matter. (Comment, Assem.Judiciary Comm. accompanying enactment of Evid.Code, § 452, 29B Wests Ann.Evid.Code, pp. 351-352.) The statute has also been used on demurrer to take judicial notice of facts commonly known in a community such as ownership, easements and control over land (Bethman v. City of Ukiah (1989) 216 Cal.App.3d 1395, 1399, fn. 4, 265 Cal.Rptr. 539) and the history and operation of a local museum (Hardman v. Feinstein (1987) 195 Cal.App.3d 157, 160, fn. 2, 161, 240 Cal.Rptr. 483).

Here, however, we have a dispute between two parties one of whom claims he was employed under an oral contract and one of whom claims the employment was pursuant to a written contract. Clearly, this dispute cannot be resolved by resorting to "facts and propositions that are not reasonably subject to dispute." ² As in this case, the "fact" a contract exists between the parties is frequently the subject of reasonable dispute. Furthermore, when such disputes arise there are no "sources of reasonably indisputable accuracy" such as treatises or encyclopedias to which the court can turn to resolve the issue. Rather, the court must rely on the testimony of the parties and their witnesses whose perceptions, memory and bias may be the subject of vigorous dispute.

Moreover, before a trial court could find that the existence of a contract was not reasonably subject to dispute the court would We conclude, therefore, the sufficiency of Gould's complaint must be tested without reference to the purported contract submitted by MSI.

have to engage in the kind of fact-finding appropriate for a trial on the merits, not for a hearing on demurrer. While most matters subject to judicial notice can be established by reference to a statute, court file, treatise or other document, a court cannot simply look at a piece of paper and conclude as a matter of law it is a contract between the parties. Here, for example, Gould claims the document MSI contends is a contract is merely an offer by him to enter into a contract with MSI which MSI never accepted. He further contends he is not bound by the terms of the document because he signed it under duress. These contentions raise questions of fact which cannot be resolved at the pleading stage of the case.

II. GOULD'S CLAIMS MSI DISCHARGED HIM TO AVOID PAYING HIM ACCRUED COMPENSATION AND IN RETALIATION FOR REPORTING OVERTIME WAGE VIOLATIONS TO MSI MANAGEMENT SUPPORT A CAUSE OF ACTION FOR TORTIOUS WRONGFUL DISCHARGE.

Gould's first two causes of action allege tortious discharge from employment in violation of public policy. (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330.) In the first cause of action Gould alleges MSI terminated him to avoid paying him accrued commissions and vacation pay. In the second cause of action he alleges MSI terminated him in retaliation for his reporting to MSI's upper management that a number of MSI employees were working overtime but not being paid overtime wages. Gould alleges his discharge on these grounds contravened fundamental public policies involving the prompt payment of wages due an employee and the payment of overtime wages to employees who work more than the standard number of hours. MSI demurred to both causes of action on the ground these policies are not fundamental public policies of the type which will support a claim for tortious wrongful discharge.

Wrongful termination from employment is tortious when the termination occurs in violation of a fundamental public policy. (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1090, 4 Cal.Rptr.2d 874, 824 P.2d 680.) A policy is "fundamental" when it is "carefully tethered" to a policy "delineated in constitutional or statutory provisions" (id. at p. 1095, 4 Cal.Rptr.2d 874, 824 P.2d 680), involves a duty affecting the public at large, rather than one owed to or imposed solely upon the parties to a dispute (id. at p. 1090, 4 Cal.Rptr.2d 874, 824 P.2d 680), and is " 'well established' " and "sufficiently clear" to the employer at the time of the discharge (ibid.). Wrongful termination cases typically arise when an employer retaliates against an employee for refusing to violate a statute, performing a statutory obligation, exercising a statutory right, or reporting an alleged violation of a statute of public importance. (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1256, 32 Cal.Rptr.2d 223, 876 P.2d 1022.) However, as we noted in ...