Roberts v. Ford Aerospace & Communications Corp.

• Decision Date: 16 October 1990
• Citation: 224 Cal.App.3d 793,274 Cal.Rptr. 139
• Court: California Court of Appeals Court of Appeals
• Parties: , 54 Fair Empl.Prac.Cas. (BNA) 519, 5 IER Cases 1649 Carl D. ROBERTS, Plaintiff and Respondent, v. FORD AEROSPACE AND COMMUNICATIONS CORPORATION et al., Defendants and Appellants. Civ. B040875.

Page 139

274 Cal.Rptr. 139

224 Cal.App.3d 793, 54 Fair Empl.Prac.Cas. (BNA) 519,

5 IER Cases 1649

Carl D. ROBERTS, Plaintiff and Respondent, v. FORD AEROSPACE AND COMMUNICATIONS CORPORATION et al., Defendants and Appellants.

Civ. B040875.

Court of Appeal, Second District, Division 6, California.

Oct. 16, 1990.

Review Denied Jan. 17, 1991.

Baker & Hostetler, McCutchen Black, Howard J. Privett, Jack D. Fudge and Ralph Zarefsky, Los Angeles, for defendants and appellants.

Association of California Tort Reform and Fred J. Hiestand as amicus curiae on behalf of defendants and appellants.

Marilyn Gilbert, Santa Barbara, for plaintiff and respondent.

STEVEN J. STONE, Presiding Justice.

Ford Aerospace and Communications Corporation (Ford) appeals from a judgment for wrongful termination in favor of Carl Roberts, respondent. The jury awarded economic and non-economic damages of $295,224.09 and punitive damages of $750,000. Ford contends that reversal is mandated because: 1) there can be no tort recovery for breach of the covenant of good faith and fair dealing; 2) the Supreme Court's grant of review of a recent appellate decision may indicate that the Fair Employment and Housing Act (Gov.Code, § 12940 et seq.) occupies the field of employment discrimination; 3) compensatory and punitive damages against Ford can be no greater than those assessed against Ford's employee defendants; and 4) the punitive damages assessed here are unconstitutional.

We granted leave to the Association of California Tort Reform to file an amicus brief in support of Ford's challenge to the constitutionality of punitive damages. For reasons expressed herein, we reject the challenges raised and affirm the judgment.

FACTS

June 6, 1983, Ford fired respondent after seven years of employment at Vandenberg Tracking Station. At the onset, respondent, a black, received favorable performance reviews, but after Ford hired a new group of employees, respondent found racially pejorative statements scrawled on the walls of the bathroom. He complained about the defaced walls and the graffiti were eventually removed. A series of incidences began where respondent was excluded from discussions; meeting times were changed without notice to him so that he arrived late and was reprimanded, and other employees ridiculed him and mimicked his manner of speech.

Respondent complained to the supervisors about these matters and about the failure to receive pay raises and chances for promotion. The evidence revealed repeated acts of harassment which escalated after he complained to management of racial discrimination. He filed complaints with the FEHC (Federal Employment and Housing Commission) to which Ford responded. After he began to complain about the discriminatory treatment, his performance reviews deteriorated and he was eventually fired.

After receiving a "right to sue" letter from the FEHC, respondent filed a complaint and "FIRST AMENDED COMPLAINT FOR DAMAGES FOR TORTIOUS BREACH OF EMPLOYMENT AGREEMENT, BREACH OF GOOD FAITH, BREACH OF CONTRACT, INTENTIONAL AND NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS, AND RETALIATORY DISCHARGE." Each of the causes of action was asserted against Ford and three individuals, Paul Barbara, Robert Bliss and Jack Luna, respondent's supervisor and station manager.

The jury ruled on special verdicts as follows: 1) respondent's termination was racially motivated in violation of public policy against racial discrimination; 2) Ford and each individual defendant breached the covenant of good faith and fair dealing; 3) Ford breached an implied or expressed promise not to terminate respondent except for good cause; 4) none of the defendants had engaged in intentional infliction of emotional distress; and 5) each defendant engaged in negligent conduct which caused severe emotional distress.

The jury awarded compensatory damages of $295,224.09, $100,000 of which were "non-economic" damages. The jury The jury awarded $750,000 in punitive damages, all assessed against Ford. Ford moved for judgment notwithstanding the verdict and for a new trial on the basis that tort damages, including punitive damages, may not be awarded in a wrongful discharge action and no substantial evidence existed to support the verdict. The trial court denied the motion.

made Ford liable for $292,224.09 and each individual defendant liable for $1,000. The jury also rendered special verdicts concerning punitive damages: 1) no defendant acted with malice in discriminating against respondent on the basis of race; 2) all defendants acted with malice in retaliating for respondent's having complained of discrimination; 3) all defendants acted with malice in violating the covenant of good faith and fair dealing.

DISCUSSION

1. Foley and Newman Do Not Compel Reversal in This Case.

In Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 663, 254 Cal.Rptr. 211, 765 P.2d 373, the California Supreme Court held that the covenant of good faith and fair dealing applies to employment contracts and that breach of the covenant gives rise only to contract damages. In Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973, 993, 258 Cal.Rptr. 592, 772 [224 Cal.App.3d 798] P.2d 1059, the Supreme Court held Foley retroactive to all cases not yet final on January 30, 1989, the date Foley became final. Ford asserts that since respondent alleged a cause of action for breach of covenant of good faith and fair dealing and since the jury awarded both tort and contract damages without differentiation against all defendants, as well as punitive damages against Ford, we must reverse the judgment. We disagree.

Newman held that a plaintiff may seek tort relief for a violation of public policy or discrimination. (48 Cal.3d 973, 990-991, 258 Cal.Rptr. 592, 772 P.2d 1059.) In California, freedom from job discrimination on specified grounds such as racial discrimination is a civil right. (Brown v. Superior Court (1984) 37 Cal.3d 477, 486, 208 Cal.Rptr. 724, 691 P.2d 272; Watson v. Department of Rehabilitation (1989) 212 Cal.App.3d 1271, 1284, 261 Cal.Rptr. 204.) Such discrimination is against public policy and an unlawful employment practice. (Watson at p. 1284, 261 Cal.Rptr. 204; Gov.Code, §§ 12920, 12940.) Thus, where an action is pleaded under the Fair Employment and Housing Act for racial employment discrimination, recovery of punitive damages under the general provisions of Civil Code section 3294 is permitted. (Monge v. Superior Court (1986) 176 Cal.App.3d 503, 509, 222 Cal.Rptr. 64; Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211, 220-221, 185 Cal.Rptr. 270, 649 P.2d 912.)

Contrary to Ford's assertions, respondent's first cause of action was for wrongful termination based on racial discrimination and was based upon Government Code section 12940. "[T]he Legislature has directed that the FEHA is to be construed 'liberally' so as to accomplish its purposes. (§ 12993.)" (Brown v. Superior Court, supra, 37 Cal.3d 477, 486, 208 Cal.Rptr. 724, 691 P.2d 272.) In Newman, supra, the Supreme Court recognized that in cases already tried, reversal might be necessary where it is not possible to excise tort damages for breach of the covenant from the remainder of the judgment. (48 Cal.3d 973, 992, 258 Cal.Rptr. 592, 772 P.2d 1059.) However, we reject Ford's assertion that the judgment must be reversed even if substantial evidence exists to support tort damages under one of the other causes of action. Substantial evidence supports the jury's findings that Ford terminated respondent in violation of public policy against racial discrimination and that all defendants acted with malice in retaliating against respondent for complaining of the discrimination.

Post-Foley cases have differed in application of the general presumption that a general verdict in favor of the plaintiff is sustainable where two theories are placed before the jury but only one is supported by substantial evidence. In Carpiaux v. Peralta Community College Dist. (1989) 215 Cal.App.3d 1220, 264 Cal.Rptr. 208 the reviewing court held that the jury reached an improper verdict where the court instructed, in contravention of Foley, that the jury could award tort damages for breach of the covenant of good faith and fair dealing, and reversed the judgment. (Id., at p. 1224, 264 Cal.Rptr. 208.)

At least two other recent appellate cases (not final at this time) have ordered reversal of non-economic or punitive damages where the judgment was based on contract causes of action which would not support tort damages post-Foley, or where the reviewing court could not ascertain upon which cause of action the jury imposed non-economic or punitive damages. Here, however, we are not faced with that dilemma. The jury found in favor of respondent on causes of action that justified imposition of non-economic damages and specifically found that all appellants acted with malice in retaliating against respondent for complaining of racial discrimination.

Thus, we know that the jury's findings justified imposition of punitive damages on the tort cause of action and the additional finding that appellants also acted with malice in breaching the covenant of good faith and fair dealing does not detract from or infect the propriety of imposition of punitive damages on the tort cause of action based on violation of public policy under Government Code section 12940 et seq. Moreover, Newman recognized that in many cases the form of the verdict or special findings might allow excision of tort damages for breach of the covenant of good faith and fair dealing from the remainder of the judgment. (48 Cal.3d at p. 992, 258 Cal.Rptr. 592, 772 P.2d 1059.)

Consequently, we find distinguishable the reasoning of Carpiaux and its progeny and choose instead to follow the holding in Mouchette v. Board of Education (1990) 217 Cal.App.3d 303, 315, 266 Cal.Rptr. 1. Where a special verdict was rendered on two causes of action and sufficient evidence...