Silva v. Lucky Stores, Inc.

• Decision Date: 29 June 1998
• Docket Number: No. F026156,F026156
• Citation: 65 Cal.App.4th 256,76 Cal.Rptr.2d 382
• Court: California Court of Appeals Court of Appeals
• Parties: , 14 IER Cases 139, 98 Daily Journal D.A.R. 7244 John SILVA, Plaintiff and Appellant, v. LUCKY STORES, INC., et al., Defendants and Respondents.

Page 382

76 Cal.Rptr.2d 382

65 Cal.App.4th 256, 14 IER Cases 139,

98 Daily Journal D.A.R. 7244

John SILVA, Plaintiff and Appellant, v. LUCKY STORES, INC., et al., Defendants and Respondents.

No. F026156.

Court of Appeal, Fifth District, California.

June 29, 1998.

[65 Cal.App.4th 258] Frank Ursini, Green & Azevedo, Modesto, and Jerry N. Budin, for Plaintiff and Appellant.

Rogers, Joseph, O'Donnell & Quinn, Renee D. Wasserman and E. Sean McLoughlin, San Francisco, for Defendants and Respondents.

OPINION

THAXTER, Associate Justice.

John Silva (Silva) appeals from the judgment entered after the court granted summary judgment for his former employers, Lucky Stores, Inc. and American Stores Company (jointly, Lucky), on his wrongful termination action. The novel issue presented is whether Silva raised a triable issue of fact regarding Lucky's decision to terminate his employment under the new standard set forth in Cotran v. Rollins Hudig Hall Internat., Inc. (1998) 17 Cal.4th 93, 69 Cal.Rptr.2d 900, 948 P.2d 412. We will conclude he did not, and we will affirm the judgment.

PROCEDURAL HISTORY

Silva began working for Lucky in November 1966 as an entry level clerk. In 1974, after intervening promotions, Silva was made a store manager. He continued to work as a store manager until October 7, 1994, when two female employees reported that he had sexually harassed them. After a month-long investigation, Lucky's review board concluded that Silva had violated the store's sexual harassment policy and procedures and terminated his employment.

Silva sued Lucky for breach of an implied contract not to terminate except for good cause and breach of the implied covenant of good faith and fair dealing. Lucky moved for summary judgment/summary adjudication on the grounds: (1) Silva's breach of contract cause of action was without merit because he was an at-will employee and Lucky had good cause to discharge him as a matter of law, and (2) Silva's breach of the implied covenant cause of action was without merit because his termination was based on Lucky's good faith belief that he violated the company's sexual harassment policy. Silva conceded that Lucky was entitled to summary adjudication on his cause of action for breach of the implied covenant of good faith and fair dealing. However, he argued, first, there were triable issues of fact as to whether he was at-will or subject to an implied contract not to be terminated except for good cause. Second, Lucky's good faith belief that he engaged in misconduct was not a defense to his breach of contract claim. Rather, the issue was whether he had actually engaged in the misconduct for which he was terminated. (Wilkerson v. Wells Fargo Bank (1989) 212 Cal.App.3d 1217, 261 Cal.Rptr. 185.) Because he denied engaging in the alleged harassment, there were triable issues of fact regarding the breach of contract claim.

The trial court found no triable issues of fact. First, Silva failed to introduce admissible evidence to rebut the Labor Code section 2922 presumption and raise a triable issue of material fact that his employment by Lucky was other than at will. Second, Silva failed to introduce admissible evidence sufficient to raise a triable issue of material fact that Lucky's decision to terminate his employment based on violation of the company's sexual harassment policy was not within the legitimate scope of its managerial discretion. The court entered judgment for Lucky. Silva appealed that decision.

FACTS

On October 7, 1994, about 4:30 or 5:00 p.m., courtesy clerk Leticia Barajas was taking an unscheduled restroom break from her job of bagging groceries at Lucky's. As she ran through the double doors into the back room, Silva was standing near the entrance to the hallway that led to the restrooms. Ms. Barajas told Silva to move. Instead of moving, Silva crouched down and grabbed her buttocks. After Silva left the store, Ms. Barajas spoke with the head clerk, Randy Wilson, who paged Lucky's human resources representative, Jeff Szczesny, to investigate the incident.

Szczesny came to the store and interviewed Ms. Barajas at 6:30 p.m. Ms. Barajas described the incident to Szczesny. When asked if she had heard any other women complain, Ms. Barajas said that checker Rochelle Saldana had told her that Silva "slapped her on the butt." Szczesny interviewed Ms. Saldana later that night. Saldana told him that several weeks earlier, Silva had slapped her buttocks while she was bending into a melon bin. When Ms. Saldana told Silva she could charge him with sexual harassment, Silva smiled, removed his name badge and said, "I'm not on the clock."

Szczesny interviewed Silva about the allegations the next morning. Silva admitted that he had crouched down as if he was going to tackle Ms. Barajas as she ran to the restroom. However, he said she bumped into him. He did not remember where his hands were but he denied touching her "butt." Silva told Szczesny he had "smacked" Ms. Saldana on the back or side of her leg six to eight weeks earlier. She was reaching into the watermelon bin and Silva thought she would fall in and hurt herself.

Szczesny interviewed Lucky employees regarding the allegations of sexual harassment. Witnesses to the Barajas and Saldana incidents corroborated that the physical contact had occurred. After the interviews, Szczesny spoke with Silva a third time to elicit his comments and explanations regarding the events reported.

At the completion of his investigation, Szczesny concluded in a written report that it was reasonable to assume that both the Barajas and Saldana incidents took place. The events were corroborated by witnesses and Silva conceded he had physical contact with both women although he asserted it was not of a sexual nature. Szczesny acknowledged that some employees felt Ms. Saldana and Ms. Barajas had ulterior motives.

Based on Szczesny's investigation, Lucky Stores' review board concluded that Silva had violated Lucky's sexual harassment policy and procedures. He improperly touched female employees in the workplace, made inappropriate comments of a sexual or offensive nature, intimidated subordinate employees, and demonstrated a willful disregard for company policy regarding sexual harassment. These actions violated company policies as well as Silva's job responsibilities. Silva was terminated on November 10, 1994, for violation of company policy and procedure.

DISCUSSION

STANDARD OF REVIEW

Summary judgment is properly granted when the papers show there is no triable issue as to any material fact, and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) ¹ When the defendant is the moving party, he must show either that (1) one or more elements of a cause of action cannot be established, or (2) there is a complete defense. (§ 437c, subd. (o )(2).) Once that burden is met, the burden shifts to the plaintiff to show the existence of a triable issue of fact with respect to that cause of action or defense. (Ibid.) We review the trial court's decision to grant defendant summary judgment de novo. We review the ruling, not the rationale. (Ojavan Investors, Inc. v. California Coastal Com. (1997) 54 Cal.App.4th 373, 385, 62 Cal.Rptr.2d 803.)

In independently reviewing a motion for summary judgment, we apply the same three-step analysis used by the superior court. We identify the issues framed by the pleadings, determine whether the moving party has negated the opponent's claims, and determine whether the opposition has demonstrated the existence of a triable, material factual issue. (Ojavan Investors, Inc. v. California Coastal Com., supra, 54 Cal.App.4th at p. 385, 62 Cal.Rptr.2d 803.) Because of the drastic nature of the summary judgment procedure and the importance of safeguarding the adverse party's right to a trial, the moving party must make a strong showing. His affidavits are strictly construed and the opposing party's are liberally construed. (Kulesa v. Castleberry (1996) 47 Cal.App.4th 103, 112, 54 Cal.Rptr.2d 669.)

1. There are no triable issues of fact as to whether Lucky, acting in good faith and following an investigation that was appropriate under the circumstances, had reasonable grounds for believing Silva had engaged in the alleged misconduct.

After the parties had briefed the case on appeal, the Supreme Court decided Cotran v. Rollins Hudig Hall Internat., Inc., supra, 17 Cal.4th 93, 69 Cal.Rptr.2d 900, 948 P.2d 412. Cotran disapproved Wilkerson v. Wells Fargo Bank, supra, 212 Cal.App.3d 1217, 261 Cal.Rptr. 185 and held that if an implied contract exists, employers who fire employees for misconduct are not required to prove that the alleged misconduct actually occurred. Rather, the employer must show that it reasonably believed that the alleged misconduct took place and otherwise acted fairly. (Cotran v. Rollins Hudig Hall Internat., Inc., supra, at pp. 107-109, 69 Cal.Rptr.2d 900, 948 P.2d 412.)

Cotran sued his former employer after he was fired for sexual harassment of two women. The termination followed a lengthy investigation by the human resources director, who interviewed 21 people, including five identified by Cotran. There was no definitive evidence of the alleged misconduct, and the resolution of the allegations depended on credibility determinations by the company's investigators. Senior management involved in the investigation ultimately concluded that Cotran likely had engaged in the harassment and terminated him. (Cotran v. Rollins Hudig Hall Internat., Inc., supra, 17 Cal.4th at pp. 96-98, 69 Cal.Rptr.2d 900, 948 P.2d 412.)

At trial Cotran testified that his sexual relationships with the two women were consensual and his accusers had ulterior motives. He had not refuted the allegations when his employer had initially confronted him with them because he was upset, frightened and felt ambushed. (Cotran v. Rollins Hudig Hall Internat., Inc., supra, 17 Cal.4th at p. 98, 69...