Malmstrom v. Kaiser Aluminum & Chemical Corp.

CourtCalifornia Court of Appeals
Writing for the CourtBENSON; KLINE, P.J., and ROUSE
Citation231 Cal.Rptr. 820,187 Cal.App.3d 299
Parties, 123 Lab.Cas. P 57,121, 2 IER Cases 180 Carl M. MALMSTROM, Plaintiff and Appellant, v. KAISER ALUMINUM AND CHEMICAL CORPORATION, et al., Defendant and Respondent. A030073.
Decision Date25 November 1986

Page 820

231 Cal.Rptr. 820
187 Cal.App.3d 299, 123 Lab.Cas. P 57,121, 2 IER Cases 180
Carl M. MALMSTROM, Plaintiff and Appellant,
Court of Appeal, First District, Division 2, California.
Nov. 25, 1986.

[187 Cal.App.3d 306]

Page 822

Thomas M. Carnes, Carnes, Aune & Dibble, San Francisco, B.E. Bergesen, III, Siegfried Hesse, Berkeley, for plaintiff and appellant.

Stephen H. Booth, Robert J. Allen, Jr., Theodore C. Borromeo, Kaiser Aluminum & Chemical Corp., Oakland, for defendant and respondent.

BENSON, Associate Justice.

Carl M. Malmstrom appeals from a judgment entered after the trial court granted the motion for summary judgment of his former employer, Kaiser Aluminum & Chemical Corporation, to the first and second causes of action of the first amended complaint. We affirm the judgment.


Pleading and Procedural Background

The first cause of action of the first amended complaint for breach of contract alleges breach of an implied contract to employ Malmstrom until his retirement, subject only to discharge for cause. It also alleges breach of Kaiser's written policies concerning placement and relocation of terminated employees. The second cause of action alleges tortious breaches of the duty of good faith and fair dealing implied in the contract. This cause of action incorporates the allegations of the first cause of action and adds [187 Cal.App.3d 307] allegations of specific breaches of the duty (1) by terminating him without making a good faith attempt to place him elsewhere within the company or with another company, (2) by refusing to purchase his home in Florida and (3) by terminating him and replacing him with a younger employee.

Kaiser filed its motion for summary judgment on the first cause of action on the grounds: (1) it was barred by the statute of frauds; (2) Malmstrom's admissions reveal no promise of protection against layoff; (3) Malmstrom signed a contract providing his employment was terminable at will thus precluding an implied agreement; and (4) Kaiser laid off Malmstrom for good cause. Kaiser's grounds for summary judgment on the second cause of action were: (1) Kaiser had no contractual duty to buy Malmstrom's home; (2) the statute of frauds bars the alleged contract to purchase the home; (3) the age discrimination claim is preempted by the provisions of the California Fair Employment and Housing Act and is barred by failure to file the claim required by the act; and (4) the claim that Kaiser failed to pursue good faith efforts to help Malmstrom find a job is groundless.

In opposition to the motion for summary judgment on the first cause of action, Malmstrom argued: (1) the employment agreement is not barred by the statute of frauds since it is conditioned upon satisfactory performance and may be performed within one year; (2) if it were subject to the statute, Kaiser is estopped to raise the statute of frauds because he would be unconscionably injured by the losses he suffered due to his move to Florida; (3) Kaiser admits Malmstrom asked for and received assurances of permanent employment if he transferred to Florida; and (4) whether Kaiser had good cause to terminate Malmstrom is a question of fact.

In his opposition to the motion for summary judgment on the second cause of action, Malmstrom abandoned his claim based on age discrimination admitting he had not filed a notice of discrimination with the appropriate governmental agency. Rather than arguing Kaiser breached the duty of good faith by failing to make a good faith effort to place him elsewhere in the company and by failing to purchase his Florida home, as alleged in the first amended complaint, Malmstrom argued that once Kaiser elected to breach its agreement with him, it had a good faith duty to pay all

Page 823

damages he suffered as a result of the breach.

The trial court granted summary judgment on both causes of action on the ground the oral contract was barred by the statute of frauds. We determine the decision below is correct, although on grounds different from that relied on by the trial court. The California Supreme Court presently has before it the issue of whether oral employment agreements are barred by [187 Cal.App.3d 308] the statute of frauds. 1 Since the nature of the resolution of that issue remains uncertain at this time, and because other grounds exist which support the decision of the trial court, we decline to rule on the propriety of the statute of fraud ruling in this case. It is well settled that "If the decision of the lower court is right, the judgment or order will be affirmed regardless of the correctness of the grounds upon which the court reached its conclusion. Two theories seem to be involved here: First, that the appellate court reviews the action of the lower court and not the reasons for its action; second, that there can be no prejudicial error from erroneous logic or reasoning if the decision itself is correct." (9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 259, p. 266.)


Factual History

The facts presented to the trial court are not in dispute although the inferences to be drawn from the facts are contested. Malmstrom was hired by Kaiser to work in its aluminum can division at the San Leandro, California plant. He commenced work as a district Customer Service Representative on January 2, 1977, four days before his fifty-sixth birthday.

Malmstrom had worked for Continental Can Company for 27 years before coming to Kaiser. He had been a general foreman. In 1976, Malmstrom learned the Continental plant was being sold and his job was being eliminated. Malmstrom was offered and took early retirement from Continental. Kaiser sought out Malmstrom after his layoff had been decided but, while he was still employed at Continental.

During the pre-hiring interviews conducted by Kaiser, Malmstrom questioned his interviewers about the permanency of the position he was offered. He was assured the job would continue as long as he performed his work satisfactorily. Malmstrom testified that at the time he was hired Mr. Johnson of Kaiser told him "any employee in Kaiser who does a commendable job, credible job, would have a longlasting job. He indicated this in a general statement that they never--it wasn't a matter of temporary layoff or anything like that, it would be a permanent position." Mr. Johnson also told Malmstrom "as long as one [does] a commendable job up to their expectations, [187 Cal.App.3d 309] that you had no fear of being laid off." Mr. Johnson also said "they never laid off anyone unless there was due cause obviously of some nature." When Malmstrom was asked during his deposition if this guarantee extended even if there were a shut down of a plant or division of Kaiser, he replied "[t]hat never entered the conversation."

On January 3, 1977, Malmstrom signed a one-page agreement with Kaiser concerning his employment. The agreement consists of six numbered paragraphs. Paragraph 1 provides "Employer employs and shall continue to employ Employee at such compensation and for such a length of time as shall be mutually agreeable to Employer and Employee." Paragraphs 2 through 5 contain provisions concerning inventions made by the employee and confidential information of Kaiser. Paragraph 6 provides "This agreement shall supersede all previous agreements by and between Employer and Employee and shall be retroactive to the date on which Employee commenced

Page 824

his employment." This written agreement is not mentioned in Malmstrom's complaint.

In April 1981, Malmstrom's supervisor told him Kaiser had decided to decentralize the Customer Service Representative functions and his job was being transferred to the Kaiser plant in Jacksonville, Florida. At that time several employees at the San Leandro plant were terminated because of the decrease in business. The number of employees at the plant went from 95 to 38. Malmstrom was offered no other job in California. Kaiser offered to transfer him to Florida. Malmstrom was 60 years old at this time. He spoke on several occasions with his superiors about the permanency of the job in Florida. Malmstrom testified that "Throughout my many discussions with Johnson and Whitman about the transfer, I was assured that this was a permanent transfer to Florida which had been approved at the highest level of the company." Whitman testified he meant it was not a temporary transfer. Malmstrom informed his supervisors he wished to work until at least age 65 and stated he would not retire at age 62. Whitman replied "It would not pay for us to send you there for only two years." Malmstrom admits he was not given assurances as to how long he would be employed in Florida. He felt it was "very implied" in conversations he had with his superiors that he would be employed beyond age 62 and at least until he was 65.

Malmstrom accepted the transfer, sold his home in California to Kaiser at a profit of over $100,000 and, at Kaiser's expense, he and his wife moved to Florida in May 1981. Malmstrom bought a new home in Florida. Kaiser paid him over $10,000 to cover the mortgage rate differential, inflation and the loan points.

[187 Cal.App.3d 310] In December 1981, Malmstrom received a copy of a memorandum from the president of Kaiser informing employees of impending major corporate changes including staffing reductions. This was the first Malmstrom knew of these changes.

Kaiser, in its motion for summary judgment, offered uncontroverted evidence by declaration and deposition testimony that business in its aluminum can division had seriously declined, that the division registered its first loss in the final quarter of 1981 and that reductions in personnel were necessary to reduce its losses. In September or October 1981 Kaiser decided to reduce its staff. In December 1981 it decided on the number of staff to be cut. Between December...

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