Koehrer v. Superior Court
| Decision Date | 03 June 1986 |
| Citation | 226 Cal.Rptr. 820,181 Cal.App.3d 1155 |
| Court | California Court of Appeals |
| Parties | Dennis KOEHRER, et al., Petitioners, v. SUPERIOR COURT of the State of California, County of Riverside, Respondents. OAK RIVERSIDE JURUPA, LTD., et al., Real Parties in Interest. E002518. |
Redwine and Sherrill and David L. Wysocki, Riverside, for petitioners.
Best, Best & Krieger and Barton C. Gaut, Riverside, for real parties in interest.
No appearance by respondents.
The trial court granted defendants' motion for summary adjudication of issues effectively disposing of plaintiffs' causes of action for tortious termination of employment and "bad faith" termination of employment. The court dismissed those causes of action and, in addition, dismissed the entire action as to all but one of the named defendants.
Plaintiffs petitioned this court for a writ of mandate contending defendants' declaration in support of the motion for summary adjudication of the issues was insufficient to establish there were no triable issues of material fact with respect to the causes of action for tortious termination, "bad faith" termination or the other causes of action as to the dismissed defendants. Plaintiffs also contend defendants' motion was in reality a motion for judgment on the pleadings, and that facts sufficient to constitute causes of action against all defendants were properly pled. In the alternative plaintiffs contend they should have at least been afforded an opportunity to amend their complaint.
This court issued an alternative writ of mandate and the matter is now before us for decision.
Norman D. Ward and Bunnie Louise Ward, the parents of plaintiff Melissa Koehrer, owned three apartment buildings in Riverside County. Plaintiffs Melissa and Dennis Koehrer managed the apartment buildings for Melissa's parents. In 1982, the Wards negotiated a sale of the properties to defendant Oak Capital Corporation (Oak Capital) and perhaps others of the defendants (see discussion, infra ). A condition of the sale was that defendant buyers would agree to employ plaintiffs to continue to manage the properties for one year. Accordingly, the purchase agreement between the Wards and Oak Capital included a provision that the buyer would negotiate a mutually acceptable employment agreement with plaintiffs. 1
As a result of the provision contained in the purchase agreement, defendant Oak Surety Management Corporation (Oak Surety) as agent for Oak Riverside and Oak Mi Casa, entered into an employment agreement with plaintiffs to manage the three apartment buildings 2 for a period of one year.
Plaintiffs began their employment on April 29, 1983. On August 15, 1983, however, plaintiffs' employment was terminated by a letter, the particulars of which are set forth in the margin. 3
As a result of their termination, plaintiffs filed the instant action attempting to state causes of action for declaratory relief, breach of written contract, breach of written third party beneficiary contract, tortious discharge, promissory fraud, and breach of the implied covenant of good faith and fair dealing ("bad faith" discharge).
Defendants answered, but thereafter filed a notice of motion for summary adjudication of the issues pursuant to Code of Civil Procedure section 437c, subdivision (f).
By their motion defendants urged upon the court that plaintiffs did not and could not state a cause of action for tortious discharge because such tort relief is available only to at-will employees, whereas plaintiffs were employed for a specified term of one year, and that in any event there was no indication plaintiffs were discharged for any reason contravening public policy. Defendants urged plaintiffs did not and could not state a cause of action for "bad faith" discharge because defendants did no more than dispute their liability under the contract and so did not breach the covenant of good faith and fair dealing; they did not deny the existence of the contract and there was no special relationship between plaintiffs and defendants invoking application of the "bad faith" doctrine. In addition, defendants urged that Oak Surety, as the party to the employment agreement, was the only defendant in privity with plaintiffs and against whom plaintiffs could proceed.
Defendants' motion was supported by a statement of undisputed facts and a single declaration by defendants' attorney incorporating specified portions of the deposition testimony of Melissa Koehrer. The excerpts from Melissa Koehrer's deposition testimony tended to show (1) plaintiffs managed the three apartment buildings for Mr. and Mrs. Ward before the properties were sold to Oak Capital; (2) Mrs. Koehrer realized she might be terminated if she and her husband failed to perform their obligations under the employment contract; (3) a particular instance in which plaintiffs refused to participate in a practice which they felt was improper did not to her knowledge have anything to do with the reason for plaintiffs' termination; (4) plaintiffs did not believe they were denied any rights granted to other employees upon termination; (5) plaintiffs have been unable to find work since they were fired by defendants; and (6) plaintiffs' parents would be able and willing to lend plaintiffs substantial moneys to purchase a business.
The "statement of undisputed facts" stated, among other things, that Oak Riverside and Oak Mi Casa entered into a contract to purchase the properties from the Wards, that a condition of the purchase was a mutually acceptable employment agreement with plaintiffs such that plaintiffs would manage the three apartment complexes for one year, and that plaintiffs knew their employment could be terminated if they did not perform in accordance with the terms of the employment agreement.
Plaintiffs filed written objections and moved to strike portions of defendants' showing in support of the motion for summary adjudication of issues. In particular, plaintiffs asserted the purchaser of the apartment buildings was Oak Capital and disputed the assertion plaintiffs knew they could be fired if they did not perform under the agreement. In opposition to the motion for summary adjudication of issues plaintiffs submitted a declaration of Norman D. Ward in which it was averred that a condition of the sale of the properties was that Oak Capital would guarantee plaintiffs employment as managers for at least one-year. The declaration of plaintiff Melissa Koehrer stated she believed plaintiffs were guaranteed a one-year term of employment; plaintiffs believed that they were working for defendant Gribin and Oak Capital, rather than solely for Oak Surety, and her statement in her deposition that she believed that she might be terminated if she failed to perform under the terms of the agreement was a statement not based upon any legal training or analysis of the employment contract.
After hearing and argument, the trial court ruled that plaintiffs' causes of action for tortious discharge and "bad faith" discharge could not be maintained. It further ruled that defendants Oak Riverside, Oak Mi Casa, Oak Capital, David Gribin and Lee M. Manuel could have no liability on any of the other causes of action and ordered the action dismissed as to all said defendants.
To determine the propriety of the trial court's rulings on the causes of action for tortious discharge and "bad faith" discharge, it is necessary to ascertain the nature and elements of those two causes of action and with respect to the latter whether an action for "bad faith" can be maintained in the employment contract context.
The opinions in a number of decisions addressing liability for "wrongful discharge" have evinced some ambivalence, if not confusion, as to the legal basis for recovery, often discussing in the same case theories of implied contract, violation of public policy and breach of the covenant of good faith and fair dealing. (See, e.g., Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 168 Cal.Rptr. 722.) No doubt part of the confusion is attributable to the undifferentiated use of the term "wrongful discharge." That term is so broad it is inadequate to distinguish between the possible theories and has on occasion, we believe, been indiscriminately applied to situations involving only breach of contract, situations involving a discharge in violation of a fundamental public policy and situations involving breach of the implied covenant of good faith and fair dealing. It would be conducive to proper analysis if courts and lawyers used a different nomenclature to denominate these different situations in which liability is imposed after all on different legal theories. Appropriate nomenclature might be "breach of employment contract" for the true breach of contract cases, "tortious discharge" for the public policy cases and "bad faith discharge" for the cases involving breach of the implied covenant of good faith and fair dealing. We have employed and shall continue to employ those terms throughout this opinion.
An important historical fact in the development of this area of the law lies in the differences in the rights, duties and remedies of the employer and employee where the employment contract is for a specified term and where the contract is for an indeterminate time ("at will"). Labor Code section 2922 4 provides in relevant part "An employment, having no specified term, may be terminated at the will of either party on notice to the other...." Contrastingly, section 2924 as construed by the decisions makes employment for a specified term greater than one month terminable by the employer during the term only for good cause.
But even in an "at will" employment the employer's...
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