Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County. William F. Highberger, Judge, Super. Ct. No. BC321224
Bradley & Gmelich, Thomas P. Gmelich, Arnold S. Levine and John K. Flock for Plaintiff and Appellant.
Ballard Rosenberg Golper & Savitt, Linda Miller Savitt, Wendy A. Moss and Christine T. Hoeffner for Defendant and Respondent.
JOHNSON, J.
Yuen-Kai Fung, Ph.D. (Dr. Fung) appeals from a judgment entered after the trial court granted summary judgment in favor of Children’s Hospital Los Angeles (CHLA) in this action for breach of an alleged employment contract and other causes of action. We affirm.
FACTS AND PROCEEDINGS BELOW
In 1984, Dr. Fung accepted a position as an assistant professor at the University of Southern California School of Medicine (USC) in the Department of Pediatrics at CHLA. According to his offer letter, Dr. Fung’s “primary academic appointment would be in the Division of Hematology-Oncology” and he would receive an annual salary of $42,000 “plus fringe benefits.” He would be “joining the Clayton Molecular Biology Program” at CHLA and his salary would be “paid by the Clayton Foundation for Research.” The offer letter also stated he would be recommended for “a tenure-track academic appointment as an Assistant Professor of Pediatrics with joint appointments in Microbiology and Ophthalmology,” and he would “have all rights and privileges attendant to any other faculty appointment” at USC. His duties and responsibilities were to include research “attempts to clone the retinoblastoma gene and elucidate its function.”
The Clayton Foundation for Research (Clayton) is a non-profit organization which engages in medical research in conjunction with non-profit hospitals. In 1979, Clayton began providing funds to CHLA for its molecular biology research program conducted by the Division of Ophthalmology. When Dr. Fung accepted the position at CHLA and joined the Clayton program in 1984, as part of his employment arrangement, he became a part-time Clayton employee. When Dr. Fung was recruited for the position, he had a discussion with the director of the Clayton Molecular Biology Program at CHLA about the anticipated duration of the funding from Clayton. In Dr. Fung’s own words, the director warned him: “Don’t feel safe. It’s no different than any other grant. So it can be here one day, and it can be gone tomorrow.”
In 1986, Dr. Fung identified and cloned the retinoblastoma gene, which was considered to be a potential cure for pediatric ocular cancer. In 1987, the head of the Molecular Biology Program of the Clayton Ocular Oncology Center at CHLA resigned. Dr. Fung was selected as a replacement candidate. The December 22, 1987 offer letter for this position was printed on CHLA letterhead and was signed by, among others, the head of the Division of Hematology-Oncology in the Department of Pediatrics at USC and the head of the Division of Ophthalmology at USC/director of the Clayton Ocular Oncology Center at CHLA. The letter, which forms the basis for Dr. Fung’s breach of contract cause of action, is quoted in full below:
The Childrens Hospital of Los Angeles is aware of efforts to recruit you away from this institution. We wish to assure you that we place great importance on your efforts here at Childrens Hospital and your significant contribution to our research productivity and environment. In the recent analysis of the institution’s future directions, it was unanimously concluded that cutting edge research, such as yours, is the key to achievement of the future strategic goals of this institution. We are, therefore, proposing by means of this letter, an offer for your consideration which we feel will insure the continued growth of your program as well as the means for advancement of your scientific and professional career.
We are prepared to designate you as Head, Clayton Molecular Oncology Program and offer a salary of $80,000 per year plus fringe benefits. In addition, we will seek your accelerated academic promotion to an Associate Professor of Pediatrics and Microbiology with tenure through the usual University of Southern California process. If approved, an additional salary increase will be associated with the promotion.
We are further willing to designate you as the recipient of a Board of Directors-authorized and named Chair in Advanced Research at Childrens Hospital of Los Angeles. Furthermore, we are prepared to offer for your use approximately 10,000 square feet of research space on the 4th floor of the new Research Building. We would encourage the recruitment of post-doctoral fellows, nationally and internationally, for the improvement of your program.
We are prepared to guarantee to you, research support of $600,000 per year from the Clayton and Scott Foundations, so long as they continue their relationships and their current levels of funding to Childrens Hospital of Los Angeles. In addition, there will be a one-time 1988 supplement of $400,000 from the Scott Foundation. As budgetary considerations permit, an additional $50,000 dollars of support from Opthalmology [sic] PS&E funds will be made available.
Childrens Hospital Los Angeles agrees to work with you and Dr. Murphree and other appropriate persons to jointly form a research and development company. The relationship between Childrens Hospital Los Angeles and the research and development company, funded with venture capital, is to be detailed in a subsequent agreement, the development of which is supported in principle by the Administration and the Board of Directors of Childrens Hospital Los Angeles. The Hospital also supports in principle, the identification of suitable space for the Research and Development company, subject to the above agreement between you, CHLA and other appropriate parties.
Childrens Hospital Los Angeles gives you the right to recruit up to three individuals at the Assistant Professor or equivalent levels to be members of your program as funds are available from the Chair or other sources. It will be allowable for up to 50% of these individuals [sic] salaries to be paid through the research and development company but not less than 50% by Childrens Hospital Los Angeles through the University of Southern California. The allotment of time for these faculty members would reflect the sources of their income. Any patents developed by the company personnel on company time will belong to the company. Patents developed in the basic research area at Childrens Hospital Los Angeles will belong to the Clayton Foundation for Ocular Oncology Research.
Finally, we will consider Dr. Ann T’ Ang for a faculty position at the Assistant Professor level in the Division of Hematology-Oncology at a salary of $45,000 per year at such time as her curriculum vitae is sufficient to be appropriate for consideration by the Promotions and Appointments Committee of the University of Southern California. Should she achieve such an independent faculty appointment in the Division of Hematology-Oncology, she will report to the Section Head for basic research and through him to the Head of the Division of Hematology-Oncology. I am sure you will agree that this important relationship will insure the best possibility for her own professional career advancement.
We are convinced that you will be able to continue in an optimal way the development of your productive academic career at Childrens Hospital of Los Angeles and the University of Southern California’s School of Medicine with the support that we have outlined above. We can assure you by this substantial offer that the institution is expressing its confidence in your abilities and your future potential as well as stating a firm commitment to help support that development in every way possible. We look forward to your prompt response to this proposal.
According to Dr. Fung, there was one additional promise not contained in the letter which was included in the 1987 offer. Dr. Fung claims the head of the Division of Ophthalmology/director of the Clayton Ocular Oncology Center promised Dr. Fung he would have for his research project use of all funds from an endowment from the Pasadena Guild which would be created and earmarked for research in pediatric ocular oncology. Moreover, with respect to the Chair in Advanced Research referenced in the December 22, 1987 offer letter, Dr. Fung claims CHLA promised to raise $1 million to fund the Chair and he believed he would have “free use” of all of the funds for his research.
Dr. Fung accepted CHLA’s 1987 offer, which we will hereafter refer to as “the 1987 agreement.” Thereafter, Dr. Fung received paychecks from Clayton and also from USC pursuant to the USC faculty contracts he signed annually. In 1991, Dr. Fung became a tenured Associate Professor of Pediatrics and Microbiology at USC. Over the years, he received salary increases and, in 2001, he earned more than $150,000. Dr. Fung received funding from the Chair in Advanced Research and the Pasadena Guild endowment.
Through the years, Dr. Fung’s supervisor (the head of the Division of Hematology-Oncology in the Department of Pediatrics at USC) and others at CHLA repeatedly told Dr. Fung he should submit grant proposals and try to attract additional external funding for his research because there was no guarantee Clayton would continue to fund his research. In April 2002, Clayton gave CHLA notice it intended to terminate funding for Dr. Fung’s research, stating: “The Foundation believes the gene research component of this project involving Dr. Fung and his group has reached maturity, and accordingly requests that their further participation on this project conclude at the end of calendar year 2002.” As explained by the President of Clayton, “effective December 31, 2002, Dr. Fung’s employment relationship with Clayton terminated and all funding for his research activities ceased.” This left Dr. Fung with no external funding for his research.
On January 1, 2003, Dr. Fung’s salary dropped to approximately $45,000 per year, the amount paid pursuant to his USC faculty contract. With the Clayton Molecular Oncology Program terminated, Dr. Fung’s supervisor asked Dr. Fung in or about June 2004 to work on a new research assignment “conducting analysis regarding retinoblastoma gene mutation, using patient samples submitted for this purpose.” Dr. Fung would still be permitted to devote 10 percent of his time to his own research activities. Dr. Fung reluctantly accepted this new assignment. As of the time Dr. Fung filed this action, funds from the Chair in Advanced Research and about 30 percent of the funds from the Pasadena Guild endowment were used to pay Dr. Fung’s USC faculty salary.
On September 9, 2004, Dr. Fung filed this action against USC and CHLA. The third amended complaint, filed July 7, 2005, is the operative complaint on CHLA’s motion for summary judgment. In his first cause of action for breach of contract, Dr. Fung alleged CHLA breached the 1987 agreement (which he referred to as “the Employment Contract”) by reducing his research space on multiple occasions between 1998 and 2003, making little or no effort to fully fund the Chair in Advanced Research and the Pasadena Guild Endowment, denying him access to any further funds from the Pasadena Guild Endowment beginning in September 2002, reducing his salary to $45,000 per year on January 1, 2003, and failing to make good faith efforts to attract external funding to pay for his salary and research. In his second cause of action, Dr. Fung alleged an implied contract existed, as evidenced by his receipt of promotions, salary increases, bonuses and other “assurances of continued employment,” under which CHLA was obligated to provide his salary and other benefits (including space and funding for his research) in the amounts specified in the 1987 agreement unless and until good cause existed to terminate his employment. Dr. Fung based his third cause of action for breach of implied covenant of good faith and fair dealing on his allegations about CHLA’s inadequate efforts to procure external funding for his research and to fully fund the Chair in Advanced Research and the Pasadena Guild Endowment, and its refusal to give him any funds from the Pasadena Guild Endowment beginning in September 2002. In his fourth cause of action for declaratory relief, Dr. Fung asked the trial court to resolve a controversy between the parties regarding the terms of the 1987 agreement. Finally, in his fifth cause of action for fraud in the inducement, Dr. Fung alleged CHLA knew the promises it made in connection with the 1987 agreement were false and CHLA did not intend to fulfill its obligations under the agreement “for the duration of [Dr. Fung]’s employment” and Dr. Fung relied on these promises to his detriment.
After Dr. Fung filed his third amended complaint, USC filed a motion for summary judgment, arguing this breach of contract action failed as against USC as a matter of law because Dr. Fung was required to address his complaints first through USC’s “own processes” and then, if necessary, by an action for administrative mandamus under Code of Civil Procedure section 1094.5. Dr. Fung and USC entered into a stipulated settlement under which Dr. Fung dismissed his action against USC with prejudice and Dr. Fung retained his right to pursue his remedies under USC’s faculty grievance procedure as provided in the USC Faculty Handbook.
In this last cause of action, Dr. Fung also alleged CHLA personnel fraudulently induced Dr. Fung to sign USC faculty contracts by falsely representing the terms of these contracts were the same as the 1987 agreement and “would not in any manner adversely affect his salary or the other terms and conditions under which he was employed by USC/CHLA.” On appeal, Dr. Fung does not discuss these allegations or assert there is a triable issue of material fact as to these allegations.
In response to a motion by CHLA, the trial court struck allegations from the third amended complaint regarding the reduction in the amount of Dr. Fung’s research space and the failure to adequately fund his research activities on grounds these allegations were barred by the statute of limitations for breach of contract claims. In his third amended complaint, Dr. Fung alleged CHLA first reduced his research space in 1998. Dr. Fung previously alleged (in his second amended complaint) CHLA began charging a fee for his research space in 1994, which deprived him of funding for his research. The trial court rejected Dr. Fung’s argument CHLA’s failure to provide him with 10,000 square feet of research space and adequate funding for his research activities constituted “continuing breaches” of the 1987 agreement which he could assert in his complaint filed September 2004, even though the first breaches of these obligations occurred outside the limitations period.
CHLA answered the third amended complaint and, on January 6, 2006, moved for summary judgment or in the alternative summary adjudication. CHLA argued, assuming the 1987 agreement could be construed as an “employment contract,” it was “a contract of permanent employment” which under the law could be “terminated or modified at will at any time and for any reason.” CHLA also argued, even if it needed good cause to modify the 1987 agreement, CHLA had it given the “position that Fung was being compensated for, Head, Clayton Molecular Biology Program ceased to exist.” CHLA further asserted good cause existed to change the terms of Dr. Fung’s “employment contract” based on the decline in his productivity (“his increasingly low level of peer review publications and resulting lack of success in obtaining grants or other external research support”) as well as “the scientific community’s general lack of interest in his research program.” CHLA’s moving papers were supported by declarations from six witnesses, deposition testimony from Dr. Fung and two other witnesses, and exhibits related to his compensation, among other things.
In opposition to the summary judgment motion, Dr. Fung argued the promises CHLA made in the 1987 agreement were not contingent on his employment status at CHLA, the continued existence of the Clayton program at CHLA, or a certain level of productivity. Notwithstanding that, Dr. Fung disputed CHLA’s claim of a decline in his productivity. He further asserted the 1987 agreement “remains in force as long as Dr. Fung is a tenured professor” at USC and CHLA can only terminate his employment contract for good cause as provided in “USC’s Faculty Handbook.” In support of his opposition, Dr. Fung submitted his own declaration and excerpts from his deposition, deposition testimony from two other witnesses, and documents related to his salary increases and receipt of funds from the Chair for Advanced Research and the Pasadena Guild Endowment, among other things. Dr. Fung also submitted numerous written objections to each of the declarations CHLA filed in support of its motion.
At the hearing on CHLA’s motion for summary judgment, the trial court stated it believed Dr. Fung had an at-will employment arrangement with CHLA which could be modified at any time for any reason, but even if CHLA needed good cause to modify the arrangement, such cause existed based on Clayton’s termination of funding for Dr. Fung’s research program. The trial court granted the motion and entered judgment in favor of CHLA.
On appeal, Dr. Fung complains the trial court did not rule on all of his evidentiary objections. At the hearing on the summary judgment motion, the trial court asked Dr. Fung’s counsel if Dr. Fung wanted rulings on all of his evidentiary objections or if counsel wanted to identify particular objections the court should rule on. Counsel directed the trial court’s attention to particular objections and the court made its rulings accordingly. It is disingenuous for Dr. Fung now to fault the trial court for doing what his counsel asked the court to do.
DISCUSSION
I. STANDARD OF REVIEW
Summary judgment is proper where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. “We review the trial court’s decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.]” In the trial court, a defendant “has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action. Once the defendant . . . has met that 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 or a defense thereto.”
Code of Civil Procedure section 437c, subdivision (c).
Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.
Code of Civil Procedure section 437c, subdivision (p)(2).
As our Supreme Court has made clear, a defendant moving for summary judgment “has shown that the plaintiff cannot establish at least one element of the cause of action by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence: The defendant must show that the plaintiff does not possess needed evidence, because otherwise the plaintiff might be able to establish the elements of the cause of action; the defendant must also show that the plaintiff cannot reasonably obtain needed evidence, because the plaintiff must be allowed a reasonable opportunity to oppose the motion [citation].” The defendant does not meet its burden on summary judgment “simply” by pointing out the “‘absence of evidence to support’ an element of the plaintiff’s cause of action [citation] . . . .”
Aguilar v. Atlantic Richfield Company (2001) 25 Cal.4th 826, 854; see Gaggero v. Yura (2003) 108 Cal.App.4th 884, 889-890, 891-892.
Aguilar v. Atlantic Richfield Company, supra, 25 Cal.4th at page 855, footnote 23.
II. THE TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT.
Our resolution of the issues on appeal turns primarily on our interpretation of the terms of the 1987 agreement. CHLA argues any contractual obligations it had to Dr. Fung were dependent upon his continued designation as “Head, Clayton Molecular Oncology Program.” Dr. Fung, on the other hand, argues the 1987 agreement was an offer of salary and research support which was not contingent on the continued existence of funding from Clayton, and CHLA could only terminate or modify the terms of the 1987 agreement based on good cause. For the reasons discussed below, we conclude CHLA’s interpretation of the agreement is the correct one.
Based on our review of the plain language in the 1987 offer letter, it is clear any promises CHLA made regarding salary and research support (including the 10,000 square feet of research space) related to the specific position Dr. Fung was being offered at CHLA. Dr. Fung was offered $80,000 per year plus fringe benefits to be the head of the Clayton Molecular Oncology Program. He was offered a significant amount of “research support” from the Clayton and Scott Foundations, “so long as they continue[d] their relationships and their current levels of funding to [CHLA].” Evidence presented on summary judgment demonstrates funds from the Chair in Advanced Research and the Pasadena Guild endowment were to be used to support Dr. Fung’s “program” or research “project” conducted under the auspices of the Clayton Molecular Oncology Program.
Funding to CHLA from the Scott Foundation terminated in or about the mid-1990s.
In December 2002, Clayton pulled the plug on the Clayton Molecular Oncology Program at CHLA and Dr. Fung’s position as head of that program ceased to exist. Whether CHLA had funding available to keep Dr. Fung’s salary and research support at its 2002 level is irrelevant to a resolution of Dr. Fung’s causes of action against CHLA. Once Dr. Fung’s program and position at CHLA ceased to exist, CHLA had no obligation to continue to abide by the terms set forth in the 1987 agreement (assuming CHLA was prohibited from modifying Dr. Fung’s arrangement before the termination of the Clayton program).
Dr. Fung asserts, because he is a tenured professor at USC, his 1987 agreement with CHLA could only be modified for good cause pursuant to the terms of USC’s faculty handbook. Dr. Fung has not demonstrated USC’s faculty handbook has any bearing on CHLA’s arrangement with Dr. Fung. Whatever claims Dr. Fung may have against USC based on the reduction in his salary are not before this court.
Dr. Fung interprets language in the 1987 offer letter concerning CHLA’s intention to advance his scientific and professional career and its “firm commitment to help support [his] development in every way possible” to mean CHLA cannot reduce his salary or research support. His interpretation is not reasonable. CHLA did advance Dr. Fung’s scientific and professional career and support his development when it selected him to be the head of the Clayton Molecular Oncology Program. Once the program and Dr. Fung’s position as its head were terminated (through no fault of CHLA), CHLA was free to modify the amount of Dr. Fung’s salary and research support.
Based on the foregoing discussion about the terms of the 1987 agreement, we conclude each of Dr. Fung’s causes of action fails as a matter of law and the trial court properly granted summary judgment in favor of CHLA. Under the 1987 agreement, CHLA has no continuing obligation to pay Dr. Fung $80,000 per year (or more) or fund research projects of his choice at the level it did in 2002 now that he is no longer the head of the Clayton Molecular Oncology Program. Nor does it have any obligation to give him funds from the Chair in Advanced Research or the Pasadena Guild endowment (although it still does divert some of these funds to pay Dr. Fung’s USC faculty salary). Dr. Fung has not presented evidence indicating CHLA breached the 1987 agreement, any implied contract concerning his salary and research support or the implied covenant of good faith and fair dealing. Absent a breach of any promise, Dr. Fung’s cause of action for fraud in the inducement necessarily fails as well.
To the extent Dr. Fung is claiming CHLA breached the 1987 agreement when it reduced his research space during the time he was head of the Clayton program, this claim is barred by the four-year statute of limitations for breach of written contract as the trial court concluded in ruling on CHLA’s motion to strike portions of the third amended complaint. Dr. Fung alleged and has submitted evidence indicating CHLA first reduced his research space in 1998. He filed this action in 2004.
CHLA met its burden on summary judgment of demonstrating Dr. Fung could not establish necessary elements of his causes of action and Dr. Fung failed to present evidence creating a triable issue of material fact.
DISPOSITION
The judgment is affirmed. Respondent is entitled to recover its costs on appeal.
We concur: PERLUSS, P. J., ZELON, J.
With respect to the numerous rulings the trial court did make, Dr. Fung contends the court abused its discretion in overruling “nearly all of [his] evidentiary objections.” Yet Dr. Fung only raises specific challenges to a handful of rulings related to evidence CHLA submitted concerning Dr. Fung’s employment status at CHLA and the alleged decline in his productivity. We need not decide whether the trial court properly or improperly ruled on these objections because the evidence is not material to our review of the summary judgment as discussed below. Any objections Dr. Fung has not identified and specifically challenged in his appellate briefs are waived on appeal.