Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Fresno County. M. Bruce Smith, Judge., Super. Ct. No. 04CECG01275.
Law Offices of Wagner & Jones, Nicholas J.P. Wagner and Christine M. Adams for Plaintiff and Appellant.
Lang, Richert & Patch, Charles Trudrung Taylor and John C. Fowler for Defendant and Respondent.
DAWSON, J.
Respondent Save Mart Supermarkets, Inc. (Save Mart) fired appellant Debra Fries for falsifying her time card and lying about it in a subsequent investigation. Fries sued for wrongful termination under four legal theories.
In this appeal, Fries challenges the superior court’s order granting summary adjudication on her two contract-based theories of recovery. The superior court determined those theories had been negated because the undisputed facts established Fries was an at-will employee. Fries disagrees, claiming triable issues of fact exist.
We conclude as follows: (1) An agreement to terminate only for good cause is not the sole way to contractually limit an employer’s right to terminate at-will employees for any or no cause; other contractual restrictions may be created by an implied-in-fact agreement. (2) Fries’s deposition testimony, which indicated she was not told expressly, orally or in writing, that she could not be discharged by Save Mart except for good cause, did not clearly and unequivocally contradict statements in her declaration about what Save Mart’s documents and personnel did express. (3) The trial court did not abuse its discretion in overruling Save Mart’s evidentiary objections. (4) Triable issues of material fact exist regarding whether the parties had an implied-in-fact agreement that limited Save Mart’s right to terminate Fries at will. (5) The erroneous grant of the motion for summary adjudication was not harmless error because it deprived Fries of the opportunity to present a theory of recovery that could have been resolved in her favor by the trier of fact.
Accordingly, judgment is reversed and the matter remanded for further proceedings.
FACTS AND PROCEEDINGS
Fries was employed by Save Mart from February 12, 1991, to May 14, 2003. Fries asserts that on May 3, 2003, she (1) purchased some groceries during her break at approximately 7:20 p.m., (2) took the groceries to her truck, (3) returned to the store, and (4) finished her shift by working to approximately 8:30 or 8:40 that evening by blowing up balloons for Mother’s Day.
The store manager observed Fries leave the store with groceries that evening and did not observe her return. Based on his observations, a copy of the grocery receipt from Fries’s purchase, and a video that showed Fries leaving the store at 7:20 p.m. and not returning, the store manager believed that Fries left her shift early and later falsified her time card.
Save Mart personnel interviewed Fries on May 10, 2003, about what occurred on the evening of May 3, 2003. At the conclusion of an investigation, Save Mart personnel concluded that Fries had falsified her time card and then lied about it. As a result, Fries’s employment with Save Mart was terminated on May 14, 2003.
The record contains additional evidence relevant to the dispute over whether Fries left work early and falsified her time card. That evidence is not significant to the issues presented in this appeal and, therefore, will not be set forth in this opinion. The main issue presented by Save Mart’s motion for summary adjudication was whether Fries was an at-will employee.
Fries’s first amended complaint alleged a claim for wrongful termination in breach of an employment contract and a claim for breach of the covenant of good faith and fair dealing. The breach of contract claim alleged that Fries was terminated without “justifiable cause.” In addition to the phrase “justifiable cause,” the allegations also stated Save Mart was contractually obligated not to terminate Fries except upon “good cause,” “just cause,” “sufficient cause,” or “justifiable or good cause.”
Save Mart’s answer made a general denial of Fries’s allegations and, as the 18th affirmative defense, alleged Fries was an at-will employee and could be terminated at any time for any reason. In May 2005, Save Mart filed a motion for summary judgment or, in the alternative, summary adjudication.
Save Mart’s moving papers asserted that there was no triable issue of material fact regarding its contentions that (1) Fries was an at-will employee who could be discharged for any reason or for no reason and (2) even if Fries had an implied contract not to be discharged except for good cause, her discharge was based on Save Mart’s reasonable investigation and good faith belief that she falsified her time card and lied about it during the investigation.
Save Mart’s separate statement included only two paragraphs of factual assertions to support its contention that Fries was an at-will employee:
“11. Nobody at Save Mart ever told Fries she could not be discharged except for good cause.
“12. Fries did not know whether she had ever read anything from Save Mart that said she could not be discharged except for good cause.”
Fries’s opposition to the motion for summary adjudication asserted that (1) it was the policy and practice of Save Mart to terminate employees only for good cause, (2) Save Mart had a contract with its employees that required progressive discipline prior to termination, (3) there was no at-will provision in the contract, and (4) Fries’s previous store managers had told her that an employee had to do something really bad or critical to get fired, and that Save Mart gave employees oral or written warnings before termination.
The contract referenced in Fries’s opposition was attached to her declaration as exhibit B. The contract was titled “Save Mart Supermarkets Select Employment Contract Retail Stores” and included sections titled “XII. Probationary Period,” “XIII. Seniority,” and “XV. Progressive Discipline.”
Save Mart’s objections to Fries’s evidence in support of opposition to the motion for summary judgment stated that Save Mart had “no objection” to exhibit B.
Employees were required to “satisfy a 360-hour probationary period before becoming a regular employee of Save Mart. Probationary employees may not exercise their right to the problem solving procedure outlined in this agreement.” The problem-solving procedure consisted of four steps, including mediation and, if mediation failed, binding arbitration before a panel of the grievant’s peer group.
Save Mart included in its moving papers a document titled “Employee Panel Arbitration Procedure” that it asserted was mailed to Fries in May 2003. The document indicated that the panel would determine either whether the grievant was “unjustly suspended” or whether the grievant was “unjustly terminated from employment.” A declaration of Rick Silva, the employment and labor relations manager for Save Mart, stated Fries never responded to the information about the employee panel arbitration procedure.
The contract section concerning progressive discipline stated: “In the event an employee’s performance, conduct or attitude does not meet Save Mart standards or an employee violates Save Mart Policies and Procedures, the Company will take disciplinary steps as may be appropriate.” The section listed the following types of disciplinary steps: (a) verbal counseling, (b) written warning, (c) suspension, and (d) termination. The provision regarding termination stated: “Employees who fail to respond to the progressive steps of discipline or who are involved in circumstances of such seriousness that warnings are not appropriate, will be terminated immediately.”
In September 2005, the superior court determined that Fries had failed to demonstrate a triable issue of fact regarding her status as an at-will employee. As a result, the superior court granted summary adjudication as to both of Fries’s causes of action for breach of contract and breach of the covenant of good faith and fair dealing. With respect to the issue of whether Fries was terminated after a reasonable investigation conducted in good faith, the superior court determined triable issues of fact existed and, thus, summary adjudication could not be granted on this ground.
Fries’s claim that she was terminated in violation of public policy was tried to a jury in February 2006. The jury found that Fries had not complained to the store manager that the produce manager called in fraudulent produce credits and “shorts” or directed her to do the same. As a result of this finding, Fries lost her claim that she had been terminated in violation of public policy, and judgment was entered in favor of Save Mart.
Fries appealed from the judgment, but limited her challenge to the superior court’s order granting summary adjudication as to her contract-based claims.
DISCUSSION
I. Standard of Review
A. Motion for Summary Adjudication
When reviewing the grant of a motion for summary judgment or summary adjudication, we independently consider whether a triable issue of material fact exists and whether the moving party is entitled to summary judgment or adjudication as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) “We independently review the record and apply the same rules and standards as the trial court. [Citation.]” (Powell v. Kleinman (2007) 151 Cal.App.4th 112, 121.)
“A summary adjudication motion is subject to the same rules and procedures as a summary judgment motion. Both are reviewed de novo. [Citations.]” (Lunardi v. Great-West Life Assurance Co. (1995) 37 Cal.App.4th 807, 819.)
A triable issue of fact exists when the evidence reasonably would permit the trier of fact, under the applicable standard of proof, to find the purportedly contested fact in favor of the party opposing the motion. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).)
Many of the rules and standards applicable to a motion for summary adjudication are set forth in Code of Civil Procedure section 437c (section 437c). Others are contained in California Rules of Court, rule 3.1350. The application of theses rules and standards is guided by the three-step analysis that this court set forth in Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1602 (Brantley). The three steps are used to determine whether a motion for summary judgment or summary adjudication should be granted.
All further citations to rules are to the California Rules of Court unless otherwise indicated.
B. Admissibility of Evidence
This court has recognized that generally, in the context of a motion for summary judgment or summary adjudication, it reviews the superior court’s final rulings on evidentiary objections by applying an abuse of discretion standard. (Powell v. Kleinman, supra, 151 Cal.App.4th at p. 122; Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 140, fn. 3.)
II. Step One Under Brantley—the Issue Presented for Adjudication
A. Framing the Issue to be Adjudicated
1. Applicable principles
Review of a motion for summary adjudication begins with identifying the issue presented for adjudication. (Zebrowski, The Summary Adjudication Pyramid (Nov. 1989) 12 L.A. Law. 28, 29 [“the first step in analyzing (a motion for summary adjudication) is to focus on the issue atop the conceptual pyramid”]; see Brantley, supra, 42 Cal.App.4th at p. 1602.) The issue presented is a proper subject for summary adjudication only if its resolution requires the application of law to fact. (Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 29.) In contrast, if the issue presented is simply a statement of fact—such as, the document in question was signed on a particular date—then the motion should be denied. (Ibid.)
The California Rules of Court squarely place the responsibility of framing the issue to be summarily adjudicated on the moving party. Rule 3.1350(b) states that, if summary adjudication is sought, “the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and repeated, verbatim, in the separate statement of undisputed material facts.” Rule 3.1350(d) provides that the moving party’s separate statement of undisputed material facts “must separately identify each cause of action” and “each supporting material fact claimed to be without dispute with respect to the cause of action .…”
2. Application to the circumstances of this case
Save Mart’s notice of motion stated that it sought summary adjudication of a number of issues, including that “[Fries] was an at-will employee.” Save Mart’s separate statement, under the heading “Adjudication Issue No. 2” asserted that Fries was an at-will employee who could be discharged for any reason or no reason.
Whether an employee is an at-will employee requires the application of law to facts. (E.g., Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 392-393 [existence of at-will employment relationship considered in context of § 437c motion]; Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 335.) Therefore, Save Mart framed an issue that is properly the subject of a motion for summary adjudication.
B. Does the Issue to be Adjudicated Negate a Cause of Action?
Once a reviewing court has determined that the issue framed by the moving party is a proper subject for summary adjudication, the court must determine whether the resolution of that issue will dispose of the cause of action challenged. This inquiry requires the reviewing court to compare the issue framed by the moving party defendant with the theory or theories of recovery asserted in the pleadings of the plaintiff. (Brantley, supra, 42 Cal.App.4th at p. 1602.)
In Guz v. Bechtel National, Inc., supra, 24 Cal.4th at page 334, the California Supreme Court used the term “hypothesis” instead of theory of recovery.
In this case, we consider whether a determination that Fries was an at-will employee will dispose of her claim for breach of contract set forth in her second cause of action and her claim for breach of the covenant of good faith and fair dealing set forth in her third cause of action.
An at-will employment, by definition, may be ended by either party at any time for any reason or no reason, and subject to no procedure except the statutory requirement of notice. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 335.) Therefore, the contract claims that allege Fries was terminated for improper reasons and without proper procedure will be negated if Save Mart establishes that Fries was an at-will employee. This conclusion is the same as the conclusion reached by the California Supreme Court in Dore v. Arnold Worldwide, Inc., supra, 39 Cal.4th at page 393. In that case, the court determined that the written documents created an at-will employment relationship and, therefore, ruled that no triable issues of material fact existed with respect to the plaintiff’s causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing. (Ibid.)
In summary, the issue to be summarily adjudicated will resolve the causes of action attacked by Save Mart’s motion for summary adjudication—namely, termination in breach of contract and in breach of the implied covenant of good faith and fair dealing.
III. Step Two Under Brantley—the Moving Party’s Showing
Step two requires the reviewing court to determine whether the moving party has made “a prima facie showing of the nonexistence of any triable issue of material fact .…” (Aguilar, supra, 25 Cal.4th at p. 850; see Brantley, supra, 42 Cal.App.4th at p. 1602.) The examination of the moving party’s showing requires a court to make two separate inquiries. These inquiries concern (1) the facts listed in the moving party’s separate statement and (2) the supporting evidence referenced in the moving party’s separate statement.
A. Sufficiency of Facts in Separate Statement
1. Applicable principles
As its first inquiry into the moving party’s prima facie showing, the court examines whether the facts presented in the moving party’s separate statement, “standing alone and if true, legally require a favorable ruling on the legal issue presented.” (See Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 29.)
The requirement that the moving party must provide a sufficiently complete factual picture to allow resolution of the legal issue presented is set forth in statute and reiterated in rule 3.1350. Section 437c, subdivision (b)(1) states that the moving party’s “supporting papers shall include a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed.” Similarly, rule 3.1350(d) states that the “Separate Statement of Undisputed Material Facts in support of a motion must separately identify … each supporting material fact claimed to be without dispute with respect to the cause of action .…”
This court has noted the use of the words “shall” and “all” in section 437c, subdivision (b)(1) and the resulting importance of complying with its terms. (Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 631-632.) In particular, when a moving party contends that a cause of action must fail, the facts material to the legal theory upon which the moving party bases its contention must be identified accurately in the separate statement. (Id. at p. 632.) “Both the court and the opposing party are entitled to have all the facts upon which the moving party bases its motion plainly set forth in the separate statement.” (Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 29.)
2. Facts stated by Save Mart
Save Mart’s separate statement asserts that the issue of whether Fries was an at-will employee can be resolved based on the following two facts:
“11. Nobody at Save Mart ever told Fries she could not be discharged except for good cause.
“12. Fries did not know whether she had ever read anything from Save Mart that said she could not be discharged except for good cause.”
As we will explain, these two facts, standing alone and if accepted as true, are not sufficient to legally require a ruling that Fries was an at-will employee. (See Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 29.)
3. Predicate fact for the at-will presumption
Labor Code section 2922, which sets forth a presumption regarding the at-will status of an employment relationship, provides in full: “An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”
Save Mart contends that this presumption applies to its employment relationship with Fries.
Evidence Code section 600, subdivision (a) provides that “[a] presumption is an assumption of fact that the law requires to be made from another fact or group of facts found or otherwise established in the action.” Pursuant to this statutory language, we must determine whether the predicate fact upon which the at-will presumption is based has been “otherwise established in the action.” (Evid. Code, § 600, subd. (b).) When this statutory language is applied in the context of an inquiry into the sufficiency of the facts set forth in a separate statement, we conclude that it and section 437c, subdivision (b)(1) require the fact upon which the presumption is based to be set forth in the separate statement.
If the fact that gives rise to a presumption is not set forth in a moving party’s separate statement, the fact has not been “established in the action” for purposes of Evidence Code section 600, subdivision (a). In that situation, the moving party has failed to show that it is entitled to rely on the presumption.
The presumption that an employment is at will only applies if the employment has “no specified term.” (Lab. Code, § 2922.) In this case, Save Mart’s separate statement is inadequate because it failed to state that Fries’s employment had no specified term. Therefore, Save Mart’s separate statement failed to comply with the requirement in section 437c, subdivision (b)(1) that the moving party’s separate statement set forth all material facts which the moving party contends are undisputed.
This omission is not the only defect in the factual statements contained in Save Mart’s separate statement.
4. Good cause and at-will employment
It is well established that an at-will employment may be ended by either party at any time for any reason or no reason, and subject to no procedure except the statutory requirement of notice. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 335.) It follows that, if an employee may be terminated only for good cause, the employment relationship is not at will.
Contrary to Save Mart’s position, the foregoing principles do not establish that an at-will employment exists in the absence of an express or implied provision requiring good cause for termination. In Guz v. Bechtel National, Inc., Justice Baxter carefully explained that an agreement that an employee would be terminated only for good cause is only one example of a contractual departure from at-will status. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 336.) Under the fundamental right to freedom of contract, the parties may agree to other lawful limitations on an employer’s termination rights. (Ibid.)
To illustrate good cause was not the only permissible contractual restriction on an employer’s termination rights, the court stated: “Among the many available options, the parties may agree that the employer’s termination rights will vary with the particular circumstances. The parties may define for themselves what cause or causes will permit an employee’s termination and may specify the procedures under which termination shall occur. The agreement may restrict the employer’s termination rights to a greater degree in some situations, while leaving the employer freer to act as it sees fit in others.” (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 336.)
Thus, even if we assume that paragraphs 11 and 12 of Save Mart’s separate statement were sufficient to establish the fact that the contract between Save Mart and Fries did not contain an agreement to terminate only for good cause, that fact would not be sufficient to legally require the conclusion that Fries was an at-will employee.
Therefore, the second defect in Save Mart’s separate statement is the failure to negate the possibility of other contractual restrictions on the right to terminate an employee.
5. Facts negating the existence of an implied good cause requirement
A third defect exists in the factual picture painted by Save Mart’s separate statement. The third defect probably is the result of the first two.
Save Mart stated two facts to support its assertion that its employment contract did not contain an agreement to terminate Fries only for good cause. These two facts only concerned what was expressed in writing and orally. They do not address what might have been implied. In other words, the facts recited in the separate statement do not mention, much less negate, the factors relevant to the existence of an implied agreement to terminate Fries only for good cause.
While the facts about what Fries was told and read might create a prima facie showing that there was no express agreement to only discharge Fries for good cause, those facts are not the only facts material to the existence of an implied-in-fact agreement to only discharge Fries for good cause. In Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 (Foley), the California Supreme Court identified several factors, apart from express terms, that were relevant to the existence and content of an implied-in-fact agreement that placed limits on an employer’s right to discharge an employee. (Id. at p. 680.) Those factors include “‘the personnel policies or practices of the employer, the employee’s longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged.’ [Citations.]” (Ibid.)
Thus, we conclude that the factors listed in Foley are material, for purposes of section 437c, to the existence of an implied-in-fact agreement limiting an employer’s termination rights. As a result, the third defect in Save Mart’s separate statement’s recital of facts is the omission of material facts—that is, facts negating the existence of an implied agreement.
It appears this third defect—the omission of the factors material to the existence of an implied-in-fact agreement—was caused by Save Mart’s belief that the two facts it recited were sufficient to invoke the presumption in Labor Code section 2922 and, as a result, shift the burden to Fries to present evidence showing a triable issue of fact existed regarding an implied-in-fact agreement.
Despite the three defects in Save Mart’s statement of undisputed facts, we will proceed to the next inquiry and consider whether the evidence referenced by Save Mart supports a finding of the facts it did state. As a result, we need not consider whether the defects constituted harmless errors.
B. Sufficiency of Evidence Referenced to Support Facts Stated
The second inquiry into the moving party’s prima facie showing concerns whether the admissible evidence identified in the moving party’s separate statement, standing alone, legally requires a finding of the facts stated. (Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 29.)
In this case, the second inquiry is straightforward. The two facts listed in Save Mart’s separate statement were taken from Fries’s deposition and accurately reflect her testimony. Thus, we conclude that the evidence referenced in Save Mart’s separate statement supports the findings that she was not informed, either orally or in writing, that she could not be discharged except for good cause.
Nevertheless, the evidence referenced by Save Mart does not cure the three defects in its statement of facts.
C. Summary
The evidence referenced by Save Mart is sufficient to establish the facts set forth in paragraphs 11 and 12 of its separate statement. Those facts, however, are not sufficient to establish that Fries was an at-will employee, which is the issue Save Mart sought to have summarily adjudicated.
Rather than addressing whether the defects in Save Mart’s moving papers constituted prejudicial errors, we will assume that Save Mart made a prima facie showing that negated Fries’s contractual theories of recovery. Consequently, we will proceed to step three under Brantley.
IV. Step Three Under Brantley—the Opposing Party’s Showing
A. General Principles
Once the moving party defendant has met its burden, “the burden shifts to the plaintiff … to show that a triable issue of one or more material facts exists as to that cause of action .…” (§ 437c, subd. (p)(2).) The third step of the Brantley analysis concerns whether a plaintiff demonstrated the existence of a triable issue of material fact. (See Brantley, supra, 42 Cal.App.4th at p. 1602.) In this case, we consider whether Fries demonstrated the existence of a triable issue of fact regarding her status as an at-will employee.
To meet the burden of demonstrating a triable issue of fact, a plaintiff must respond to the motion with admissible evidence. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 356.)
B. Fries’s Opposition Papers and Save Mart’s Response
Fries filed a statement of undisputed (or disputed) material facts in opposition to Save Mart’s motion for summary adjudication that included the following paragraphs.
“28. It is the policy and practice of Save Mart to terminate employees only for good cause.
“29. Save Mart has a contract with its employees that requires progressive discipline prior to termination. There is no ‘at-will’ provision in this contract.
“30. [Fries] had been told by her previous store managers, Ed Smithers, Glen Jones, and Wayne Hickman that employees had to do something really bad or critical to get fired and that Save Mart would give employees oral and/or written warnings before being fired.”
Fries referenced paragraph 16 of her August 23, 2005, declaration as the evidentiary support for the factual statements made in paragraphs 29 and 30 of her separate statement. That paragraph of her declaration provides:
“16. I had been told by my previous store managers, Ed Smithers, Glen Jones, and Wayne Hickman that employees had to do something really bad or critical to get fired and that Save Mart would give employees oral and/or written warnings before being fired. Exhibit ‘B’ to my declaration is a true and correct copy of an employment contract between … Save Mart and its employees. I was advised that the policies therein applied to termination and discipline. Paragraph XV of the contract provides for progressive discipline prior to termination. I was never told that I was an ‘at-will’ employee. I never signed an ‘at-will’ agreement.”
Save Mart responded to paragraphs 28 through 30 of Fries’s separate statement in the same way. Save Mart objected, asserted the statement made was irrelevant to its motion and to the issue whether Fries was an at-will employee, and contended the statement did not create a disputed issue of material fact. Save Mart’s response also incorporated evidentiary objections it filed.
Save Mart’s written objections to Fries’s evidence stated that Save Mart objected to the entirety of paragraph 16 of Fries’s declaration “on the grounds that it lacks foundation, sets forth conclusions rather than facts, lacks specificity as to time, place, and circumstance, and assumes facts not in evidence.” With respect to exhibit B to Fries’s declaration, Save Mart asserted that it had no objection.
C. The Superior Court’s Order
1. Contradiction between Fries’s deposition and declaration
The superior court determined that the statement in Fries’s declaration regarding what she had been told by previous store managers contradicted her deposition testimony that she was not told expressly, orally or in writing, that she could not be discharged by Save Mart except for good cause. As a result, the superior court disregarded that portion of her declaration and the facts asserted in paragraph 30 of her separate statement.
2. Ruling on Save Mart’s Evidentiary Objections
The paragraph of the superior court’s ruling that addressed the evidentiary objections made in connection with the motion for summary adjudication stated: “The parties have raised a number of evidentiary objections. The court has relied only upon admissible evidence herein, and it hereby overrules the parties’ objections.”
3. Ruling regarding triable issues
The superior court determined that paragraphs 28 and 29 of Fries’s separate statement were “insufficient to create a triable issue of fact as to the existence of an implied in fact contract that the employee can only be terminated for good cause.” The superior court concluded that Fries had not demonstrated a triable issue of fact regarding her status as an at-will employee and, therefore, granted summary adjudication as to Fries’s claims for breach of the employment contract and breach of the covenant of good faith and fair dealing.
D. Contradiction Between Declaration and Deposition Testimony
1. General principle
When reviewing a motion for summary judgment or adjudication, the superior court in its discretion may give great weight to admissions made in a deposition and disregard contradictory and self-serving statements made in a party’s declaration. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22 (D’Amico); Preach v. Monter Rainbow (1993) 12 Cal.App.4th 1441, 1451.) The discretion to disregard a party’s declaration only exists if the declaration contradicts a clear and unequivocal admission. (D’Amico, supra, at p. 21.)
2. Case law applying the principle
In D’Amico, supra, 11 Cal.3d at page 21, the California Supreme Court discussed with approval the case of King v. Andersen (1966) 242 Cal.App.2d 606. In King, the plaintiff sued a store security officer for assault. (Id. at p. 608.) During the course of his deposition, the plaintiff admitted two times that the security officer did not apply any force. (Id. at p. 610.) In an affidavit opposing a motion for summary judgment, the plaintiff asserted the security officer grabbed him with greater force than necessary. (Ibid.) Based on the “clear and unequivocal admission by the plaintiff” in his deposition, the court concluded that the affidavit presented no substantial evidence of the existence of a triable issue of fact regarding the assault claim and granted the motion for summary judgment. (Ibid.) The California Supreme Court quoted the standard applied in King—clear and unequivocal admission—with approval. (D’Amico, supra, 11 Cal.3d at p. 21.)
Another example of the application of the clear and unequivocal admission standard occurred in Benavidez v. San Jose Police Dept. (1999) 71 Cal.App.4th 853, 861-863 [quoting D’Amico’s approval of the “clear and unequivocal admission” standard].) In that case, the plaintiff sued police officers for negligence in connection with their handling of assaults committed by her live-in boyfriend. (Benavidez v. San Jose Police Dept., supra, at p. 856.) In her declaration opposing a motion for summary judgment, the plaintiff stated that she asked the police officers who arrived at the scene whether she could be taken to a shelter. (Id. at p. 860.) The appellate court compared her declaration to her deposition testimony as follows: “Plaintiff’s statement that she told the officers she wanted to go to a shelter and that they ignored her directly and unequivocally contradicts her testimony that she did not ‘say anything’ and that she did not tell them she wanted to leave her apartment.” (Id. at p. 861.) As a result, the appellate court determined that the plaintiff’s deposition testimony and declaration were “contradictory and mutually exclusive,” and the trial court acted within its discretion in disregarding the declaration. (Id. at p. 863.)
3. Application to Fries’s deposition and declaration
In this case, we must apply the principles approved in D’Amico and determine whether Fries’s deposition testimony contained a clear and unequivocal admission that contradicted her declaration. (See Haney v. Aramark Uniform Services, Inc., supra, 121 Cal.App.4th at p. 637 [this court concluded that plaintiff explained, rather than contradicted, prior deposition testimony].)
During her July 2004 deposition, Fries was asked: “Did anyone ever tell you, while you were employed at Save Mart, that the only way you could be terminated was for good cause?” Fries answered, “No.”
Fries’s August 2005 declaration stated: “I had been told by my previous store managers, Ed Smithers, Glen Jones, and Wayne Hickman that employees had to do something really bad or critical to get fired and that Save Mart would give employees oral and/or written warnings before being fired.”
We conclude that Fries’s deposition testimony and her declaration do not directly conflict. The declaration does not assert that the store managers used the phrase “good cause” in their conversations with her. If her declaration had asserted the phrase “good cause” was used, then it would not be possible for both her deposition testimony and her declaration to be accurate.
Although the conflict is not direct—not like the direct conflict between testifying that no force was used and then declaring unnecessary force was used (King v. Andersen, supra, 242 Cal.App.2d at p. 610)—we next consider whether the indirect conflict is clear and unequivocal because there is only one reasonable interpretation of the deposition question and answer.
If the question and answer are ambiguous—that is, are susceptible to more than one reasonable interpretation (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1403)—then the question and answer cannot be interpreted as a clear and unequivocal admission.
Here, the deposition question’s use of the phrase “good cause” was ambiguous because it could have been used as a legal term of art or it could have been used less formally. This ambiguity carries over to the answer because Fries could have thought the phrase was a legal term of art and the purpose of the question was to determine whether that particular term was ever used by Save Mart personnel in their conversations with her. As a result, there is a reasonable possibility that Fries interpreted the question literally before giving her answer—that is, she considered whether her previous store managers had spoken the phrase “good cause.”
We recognize that a trier of fact might regard Fries’s deposition testimony as inconsistent with her statements regarding what her previous store managers told her about why Save Mart would terminate an employee. Whether an inconsistency exists and what affect any inconsistency has on Fries’s credibility are matters for the trier of fact.
There is another reason why Fries may have interpreted the question as inquiring only about actual use of the phrase “good cause.” Lawyers preparing a witness for a deposition routinely advise the witness to listen carefully to the question being asked and answer only that question. (See Rogers & Ryan, Navigating the Bylaw Maze in NCAA Major-Infractions Cases (2007) 37 Seton Hall L. Rev. 749, 758 [“when preparing a client for a deposition, skilled trial lawyers know that sound advice is to inform the witness to answer only the question asked and not to volunteer information”]; Note, Professional Conduct and the Preparation of Witnesses For Trial: Defining the Acceptable Limitations of “Coaching” (1987) 1 Geo. J. Legal Ethics 389, 391, fn. 9 [practical advice to attorneys for enhancing a witness’s credibility and ability to communicate effectively includes advising the witness to answer truthfully, answer only the question asked, and refrain from volunteering information].)
We conclude that there is more than one reasonable interpretation of the deposition question and that one of these reasonable interpretations does not contradict Fries’s declaration. The deposition did not produce a clear and unequivocal admission of the breadth asserted by Save Mart. Therefore, Fries’s deposition testimony and the statements in her declaration are not necessarily mutually exclusive. (Benavidez v. San Jose Police Dept., supra, 71 Cal.App.4th at p. 863.) Therefore, the situation presented did not give the superior court the discretion to disregard the declaration or the facts set forth in paragraph 30 of Fries’s separate statement.
E. Admissible Evidence and Save Mart’s Objections
Save Mart challenges the superior court’s failure to sustain its evidentiary objections to Fries’s declaration.
1. Superior court ruled on Save Mart’s objections
First, Save Mart contends the superior court did rule on its objections and, therefore, this case is not governed by the rules applicable when a superior court fails to rule on evidentiary objections. (See Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 670, fn. 1 [defendant’s objections to plaintiff’s evidence were not preserved for appeal because defendant failed to obtain rulings from trial court].)
We agree that the superior court did rule on Save Mart’s objections. Our conclusion is based on an interpretation of the superior court’s order, which stated: “The court has relied only upon admissible evidence herein, and it hereby overrules the parties’ objections.”
Save Mart appears concerned that this court might view the statement that the superior court only relied upon admissible evidence as an implied ruling sustaining some evidentiary objections. Save Mart’s concern is based on Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, a case in which the First Appellate District treated such a statement by the superior court as sustaining objections to inadmissible evidence. (Id. at p. 1419.) The concern is unfounded because five years ago this court rejected the Biljac approach and treated a statement by the superior court that it was only relying on admissible evidence as impliedly overruling any evidentiary objection not specifically sustained. (Alexander v. Codemasters Group Limited, supra, 104 Cal.App.4th at pp. 140-141.)
Recently, the First Appellate District joined this and other courts of appeal in recognizing that the Biljac approach to evidentiary objections is not good law. (Demps v. San Francisco Housing Authority (2007) 149 Cal.App.4th 564, 578; see Sambrano v. City of San Diego (2001) 94 Cal.App.4th 225, 234-238 [Ct. App., Fourth Dist.].)
Accordingly, the superior court’s statement that it only relied on admissible evidence did not create any ambiguity in its explicit statement overruling the evidentiary objections of the parties. Because an explicit ruling was made, Save Mart did not waive the right to challenge on appeal the unfavorable evidentiary rulings of the superior court. (Ann M. v. Pacific Plaza Shopping Center, supra, 6 Cal.4th at p. 670, fn. 1.)
2. The superior court did not abuse its discretion
We apply an abuse of discretion standard in reviewing the superior court’s final evidentiary rulings. (See part I.B., ante.)
Save Mart objected to the entirety of paragraph 16 of Fries’s declaration, claiming it lacked foundation and specificity as to time, place, and circumstance. For instance, Save Mart contends that Fries did not establish (1) that she had the capacity to perceive, recall and communicate the alleged conversations or (2) that the comments allegedly made by her previous store managers were made in the course and scope of their duties, or were made in the workplace.
We conclude that Fries’s statement that “I had been told by my previous store managers” was sufficient to establish her personal knowledge of the statements made by her previous store managers. Furthermore, the superior court did not abuse its discretion by admitting the declaration without additional information about the specific time, place or circumstances regarding the statements of the previous store managers. Here, the superior court may have determined the statements were relevant by liberally construing the declaration and inferring that the statements were made during the course of the store managers’ employment. This inference is not a great leap because Fries’s statements about what the store managers told her are consistent with the provisions of the contract attached to her declaration as exhibit B. This corroboration by a Save Mart document supports the relevance of Fries’s statements regarding what she was told. Therefore, the superior court did not abuse its discretion in overruling the objections to paragraph 16 of Fries’s declaration.
When considering a motion for summary judgment, the reviewing court must strictly scrutinize the moving party’s papers and liberally construe the declarations of the party opposing summary judgment. (Cochran v. Cochran (2001) 89 Cal.App.4th 283, 287.)
Save Mart also asserts that there is a foundational gap in the declaration because Fries’s statements refer to statements made about employees in general, and she failed to show that the statements related to her contract with Save Mart. Save Mart built this argument on the false premise that the parties to the implied contract must be only Save Mart and Fries. This premise was rejected by the California Supreme Court when it recognized that the implied contract may be between the employer and its employees. For instance, in Guz v. Bechtel National, Inc., the court was persuaded there was a triable issue of fact concerning whether that employer’s guidelines, written policies, or both, formed part of an implied contract between Bechtel and its employees. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 346.) Thus, the implied contractual terms need not be specific to the plaintiff employee. Applying this principle in this case, the superior court may have liberally construed Fries’s declaration by inferring that the statements by the store managers applied to Fries because she was a member of the group—Save Mart employees—that was the subject of the managers’ statements. In doing so, the superior court did not abuse its discretion.
Save Mart also objected to the relevancy of the assertion in Fries’s separate statement that Save Mart’s policy and practice was to terminate employees only for good cause. We conclude the superior court correctly overruled this objection. An employer’s policies and practice are among the facts relevant to the existence and content of an implied-in-fact agreement placing limits on the employer’s right to discharge employees. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at pp. 336-337.)
F. Triable Issues of Fact
Because Save Mart’s attempts to exclude or disregard Fries’s evidence have been unsuccessful, it is relatively easy to determine that a triable issue of material fact exists and summary adjudication should have been denied. (See Foley, supra, 47 Cal.3d at p. 677 [question of fact exists where evidence of parties’ conduct permits conflicting inferences regarding existence of implied agreement].)
Fries’s statement of facts and the evidence referenced in support of those facts address the factors relevant to the existence of an implied-in-fact contractual limitation on the right to discharge an employee at will. (See part III.A.5, ante [Foley factors].)
First, Fries asserted and Save Mart did not dispute that there was no at-will provision in a contract applicable to her employment by Save Mart. The absence of an at-will provision makes it more likely that contractual restrictions on the right to discharge an employee can be implied. Indeed, a triable issue of fact may exist even when there is language in a written policy that is closely akin to an at-will provision. In Guz v. Bechtel National, Inc., Personnel Policy 1101 stated that Bechtel employees had no agreement guaranteeing continuous service and “‘may … be terminated at the option of Bechtel.’” (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at pp. 328, 339.) The court stated that this disclaimer language did not foreclose the plaintiff from proving the existence and breach of an implied contract limiting Bechtel’s termination rights.
Second, with respect to longevity of service, Fries worked for Save Mart for over 12 years before she was fired. She was well beyond the 360-hour probationary period and, therefore, had attained the status of a regular employee. Longevity of service, standing alone, is not sufficient to create the basis for an implied agreement to limit Save Mart’s termination rights, but it does provide a context for considering the other factors. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 342 [long and successful service is not necessarily irrelevant to the existence of implied contractual rights against termination at will].) In particular, the longer an employee has worked for an employer, the larger the potential base of conduct from which to infer the existence of an implied agreement. For example, Fries worked long enough to be told by three different store managers about Save Mart’s use of oral and written warnings before firing an employee.
Third, Fries contends that Save Mart promulgated a progressive discipline policy that is set forth in her employment contract with Save Mart. The first sentence in the contract provision regarding progressive discipline stated that Save Mart “will take disciplinary steps as may be appropriate.” Based on this contract provision and what her previous store managers had told her about oral and written warnings, Fries’s separate statement asserted that “Save Mart has a contract with its employees that requires progressive discipline prior to termination.” Save Mart’s reply papers did not dispute this assertion of fact, much less demonstrate that undisputed facts established the assertion was false. Save Mart only objected to this asserted fact on grounds of relevancy, and that objection was denied.
We note that this assertion of fact does not state specifically whether the contractual requirement is expressed or implied.
We conclude the provision regarding progressive discipline is relevant to Fries’s status as an at-will employee. As stated previously, there are more ways to contractually limit an employer’s right to terminate at will than requiring good cause for termination. (See part III.A.4, ante.) Accordingly, Fries is not necessarily required to specifically show an implied agreement to terminate only for good cause. The motion for summary adjudication must be denied if Fries established a triable issue of fact regarding any contractual restriction on Save Mart’s right to terminate at will. Thus, contrary to Save Mart’s approach, our analysis is not limited to whether a there may be an implied-in-fact agreement to terminate only for good cause. Therefore, the existence of an agreement to impose progressive discipline is relevant because such an agreement would have limited Save Mart’s right to terminate Fries at will.
In other words, the factual dispute regarding a contractual obligation to impose progressive discipline is material for purposes of section 437c.
Save Mart’s moving papers sought summary adjudication of the issue whether Fries was an at-will employee and not the narrower issue whether Fries could be discharge only for good cause.
We further conclude that Fries established a triable issue of fact concerning the existence of an agreement to impose progressive discipline prior to termination. The written contract and the statements of Fries’s previous store managers are sufficient evidence to support the existence of the triable issue of fact. As a result, a jury could infer an agreement to impose progressive discipline based on Fries’s reasonable reliance on the contract provisions as amplified by the statements of three store managers. (See Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 343 [reasonable reliance as the basis for an implied agreement].)
At oral argument, counsel for Save Mart asserted that the progressive discipline provisions reserved to Save Mart the right to establish what discipline was appropriate. We conclude that Save Mart’s moving and reply papers did not establish that there were no triable issues of material fact regarding this interpretation of the progressive discipline provisions.
In Guz v. Bechtel National, Inc., the California Supreme Court “acknowledge[d] a triable issue that Guz, like other Bechtel workers, had implied contractual rights under specific provisions of Bechtel’s written personnel policies.” (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 326.) Elsewhere the court stated: “There seems little doubt, and we conclude, a triable issue exists that the specific provisions of these [written personnel p]olicies did become an implicit part of the employment contracts of the Bechtel employees they covered, including Guz.” (Id. at p. 345.) In this case, we conclude that the written contract should be given as least as much, if not more, importance than the importance attached to the written policies and guidelines in Guz v. Bechtel National, Inc.
Fourth, Fries also asserts there is a triable issue of fact regarding the existence of an agreement to limit the causes for which Save Mart may terminate an employee. Again, the evidence supporting this assertion is the written contract and the statement of her previous store managers. The written contract states that employees “who fail to respond to the progressive steps of discipline or who are involved in circumstances of such seriousness that warnings are not appropriate, will be terminated immediately.” This language is consistent with Fries’s statement that her previous store managers told her “that employees had to do something really bad or critical to get fired and that Save Mart would give employees oral and/or written warnings before being fired.”
We need not resolve the exact nature of the grounds or the level of the infraction that is so serious as to render warnings inappropriate. The existence of a triable issue of fact regarding some restriction on the grounds for termination is enough to preclude summary adjudication of the issue that Fries was an at-will employee. (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 336.) Similar to our determination regarding the procedural limitations on Save Mart’s right to terminate, we conclude that the evidence is sufficient for a trier of fact to find that Save Mart created an expectation that an employee would not be fired without grounds or reasons and that Fries reasonably relied on this expectation.
Accordingly, we conclude there are triable issues of fact concerning the existence of an implied agreement to limit the grounds or manner of termination. Therefore, the motion for summary adjudication should have been denied.
V. Prejudicial Error
Save Mart argues that the judgment must be affirmed because Fries failed to demonstrate that the errors resulted in a miscarriage of justice.
We reject this argument and conclude the error was not harmless. “It is reversible error, however, for the court to deprive a party of a crucial theory or exclude admissible evidence in an action that would have supported a jury verdict in his or her favor. (See Grudt v. City of Los Angeles (1970) 2 Cal.3d 575, 588 ….)” (McDaniel v. Gile (1991) 230 Cal.App.3d 363, 376; see Enterprise Leasing Corp. v. Shugart Corp. (1991) 231 Cal.App.3d 737, 746-747.)
In this case, the order granting summary adjudication deprived Fries of a legal theory of recovery that would have supported a jury verdict in her favor.
Save Mart’s use of the primary right theory to support an argument that Fries received a jury trial on her cause of action for wrongful termination is not convincing. (See generally Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904 [primary right theory is invoked when a plaintiff attempts to divide a primary right and enforce it in two different lawsuits].) As indicated in the quote from McDaniel v. Gile, reversible error occurs when a party is deprived of a theory that would have supported a jury verdict in his or her favor. Accordingly, use of the primary right theory in this case does not support the conclusion that Fries was not harmed by the erroneous grant of summary adjudication.
DISPOSITION
The judgment is reversed and the superior court is directed to (1) vacate its order granting summary adjudication as to Fries’s causes of action for breach of contract and breach of the covenant of good faith and fair dealing and (2) enter a new order denying that motion. Fries shall recover her costs on appeal.
WE CONCUR: HARRIS, Acting P.J., WISEMAN, J.
The superior court probably ignored this defect because Fries’s opposition papers did not challenge Save Mart’s reliance on the statutory presumption and included arguments that attempted to rebut the statutory presumption of at-will employment.
Also, we recognize that the portion of the store managers’ statements concerning the use of oral or written warnings before firing an employee is not necessarily inconsistent with the absence of a good cause requirement. (See Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 336 [distinguishing between contractual limitations on the grounds for termination (causes) and contractual limitations on the manner of termination (procedures)].)