Opinion
22-35001
11-09-2022
JOSEPH J. HESKETH III, Plaintiff-Appellant, v. TOTAL RENAL CARE, INC., Defendant-Appellee.
NOT FOR PUBLICATION
Submitted November 7, 2022 [**] Portland, Oregon
Appeal from the United States District Court for the Western District of Washington James L. Robart, District Judge, Presiding D.C. No. 2:20-cv-01733-JLR
Before: BUMATAY and SANCHEZ, Circuit Judges, and BAKER, [***] International Trade Judge.
MEMORANDUM [*]
Joseph Hesketh appeals the district court's orders granting Total Renal Care, Inc., (1) judgment on the pleadings on his contract breach and promissory estoppel claims regarding Total Renal Care's alleged breach of its Disaster Relief Policy and (2) summary judgment on his good faith and fair dealing claim as to that same Policy. We have appellate jurisdiction under 28 U.S.C. § 1291 and we affirm.
We review a grant of judgment on the pleadings de novo. Honey v. Distelrath, 195 F.3d 531, 533 (9th Cir. 1999). "Judgment on the pleadings is proper when, taking all the allegations in the pleadings as true, the moving party is entitled to judgment as a matter of law." Id. at 532. We likewise review a grant of summary judgment de novo. Yanez v. United States, 63 F.3d 870, 874 (9th Cir. 1995). "[T]he grant of summary judgment is reviewed to determine if, viewing the facts in the light most favorable to the nonmoving party, there are no issues of material fact and the district court correctly applied the substantive law." Id. Sitting in diversity, we apply Washington's state law to these substantive claims. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938).
1. The district court found that, even assuming a contract was formed, Hesketh did not sufficiently plead that Total Renal Care satisfied the conditions precedent in the Disaster Relief Policy and that Hesketh "seems to concede that neither condition was fulfilled." "A condition precedent is a fact or event included in a contract that must take place before a right to immediate performance arises." Lokan & Assocs., Inc. v. Am. Beef Processing, LLC, 311 P.3d 1285, 1289 (Wash.Ct.App. 2013) (emphasis added).
"The Disaster Relief Policy provides for pay continuance during an emergency time frame when a declared emergency or natural disaster prevents teammates from performing their regular duties." "The emergency time frame," in turn, "will be identified on a case-by-case basis by local leadership . . . and the Disaster Governance Council ...." "If a designated facility or business office is open during the emergency time frame, teammates who report to their location and work their scheduled hours will be paid premium pay for all hours worked"; the Policy defines "premium pay" as 1.5 times base pay. Thus, the Policy has two conditions precedent- (1) a "declared emergency or natural disaster" must prevent employees from doing their normal work and (2) local management must define the "emergency time frame" during which the Policy requires higher pay. Hesketh not only fails to allege that he was unable to do his normal work, but he admits that he worked remotely prior to the COVID-19 pandemic and continued to do so during the pandemic. As the district court correctly noted, Hesketh's admission is fatal to his claim.
As to the "emergency time frame," Hesketh's argument appears to be that such a time frame automatically began to run when either the Governor of Washington or the President declared a COVID-related state of emergency in early 2020. He argues that management then determines, at some later date, "when the emergency period should be deemed to be over." But his argument ignores the Disaster Relief Policy's plain language stating that "[t]he emergency time frame . . . will be identified" by management. The Policy does not say the time frame's conclusion or end date will be identified-it says the time frame will be identified, which the district court interpreted as meaning the time frame as a whole. We agree with that reading.
2. A promissory estoppel claim based on statements in an employee handbook requires an employee to prove: "(1) whether any statements therein amounted to promises of specific treatment in specific situations; (2) if so, whether the employee justifiably relied on any of these promises; and, finally, (3) whether any promises of specific treatment were breached." Bulman v. Safeway, Inc., 27 P.3d 1172, 1174-75 (Wash. 2001) (en banc). The district court found Hesketh failed to satisfy the first element because the Disaster Relief Policy is too discretionary to constitute a promise of specific treatment in specific situations. The Policy states that the emergency time frame is to be determined "on a case-by-case basis" by management. "[W]here the employment manual gives the employer discretion in applying the . . . procedures, courts have held as a matter of law that the manual does not provide a promise of specific treatment in a specific circumstance." Drobny v. Boeing Co., 907 P.2d 299, 303 (Wash.Ct.App. 1995) (citing Stewart v. Chevron Chem. Co., 762 P.2d 1143, 1145-46 (Wash. 1988)). The district court's decision was therefore correct.
Hesketh alternatively argues that "an employee justifiably relies on a promise if he 'is induced thereby to remain on the job and not actively seek other employment.'" His selective quotation omits the requirement that the promise be one of "specific treatment in specific situations." Thompson v. St. Regis Paper Co., 685 P.2d 1081, 1088 (Wash. 1984) (en banc) (emphasis removed). Because no such promise existed here, his argument fails.
Hesketh's argument fails for another reason. In support of his claim that he changed his position to his detriment, he cites his own declaration in support of his opposition to Total Renal Care's summary judgment motion. The district court granted judgment on the pleadings as to the promissory estoppel claim on August 16, 2021. Hesketh's summary judgment declaration was dated October 25, 2021. Thus, even if it were appropriate for the district court to consider a document outside the pleadings in ruling on a Rule 12(c) motion, Hesketh's declaration was not before the district court at that time and cannot support his argument. See Huynh v. Chase Manhattan Bank, 465 F.3d 992, 1000 (9th Cir. 2006) (declining to consider declaration that was not before district court based on general rule that "[i]t is rarely appropriate for an appellate court to take judicial notice of facts that were not before the district court").
3. "The implied duty of good faith is derivative, in that it applies to the performance of specific contract obligations. If there is no contractual duty, there is nothing that must be performed in good faith." Johnson v. Yousoofian, 930 P.2d 921, 925 (Wash.Ct.App. 1996) (citations omitted). The district court found that Total Renal Care had no contractual duty to Hesketh as to the matters at issue in this case because the conditions precedent for implementing the Disaster Relief Policy were not satisfied. Because, as explained above, we affirm the district court's finding that the conditions precedent were not satisfied, we therefore affirm the district court's finding on the implied duty of good faith and fair dealing as well.
Hesketh has moved to certify two questions of law, both relating to the use of disclaimers in employee handbooks, to the Washington Supreme Court. Because we resolve this case without addressing the disclaimers in question, we DENY his motion as MOOT.
[*] This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
[**] The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).
[***] The Honorable M. Miller Baker, Judge for the United States Court of International Trade, sitting by designation.