From Casetext: Smarter Legal Research

Libby v. Farmers Ins. Exchange

California Court of Appeals, Second District, Fifth Division
Jun 17, 2008
No. B201508 (Cal. Ct. App. Jun. 17, 2008)

Opinion

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County No. BC354969, Elihu M. Berle, Judge.

Law Office of John J. Perlstein, John J. Perlstein and Megumi Horiuchi for Plaintiff and Appellant.

Seyfarth Shaw LLP, Raymond R. Kepner and Michael D. Mandel for Defendant and Respondent.


TURNER, P. J.

I. INTRODUCTION

Plaintiff, Robert J. Libby, appeals from the entry of summary judgment on his wrongful termination complaint in favor of his former employer, defendant, Farmers Insurance Exchange. There is no triable issue that he was lawfully terminated from his employment as a liability claims supervisor and the revelation of the facts underlying his discharge to his fellow employees were true. Thus, we affirm.

II. BACKGROUND

A. The Complaint

Plaintiff sued defendant on July 6, 2006 alleging causes of action for: breach of the implied-in-fact contract terminate only for good cause (first); wrongful termination in violation of public policy (second and third); breach of the implied covenant of good faith and faith dealing (fourth); and defamation (fifth). The complaint alleged the following. Plaintiff began working for defendant in July 1990 as a claims adjuster and was ultimately promoted in 2000 to the position of liability claims manager at the La Mirada branch office. Defendant’s employees received annual performance reviews. According to the complaint, “The reviews attempt to assess the performance of each claims representative on an objective basis that takes into account various statistics that track the work performed by each employee.” The performance reviews are produced on standardized forms in accordance with defendant’s policies. Plaintiff’s duties as a liability claims manager included approving a majority of performance reviews of defendant’s liability claims representatives. Craig Dye, who was plaintiff’s supervisor, would review the remainder of the performance reviews.

The complaint further alleged that plaintiff received yearly positive performance reviews and profit-sharing bonuses. In 2005, plaintiff received a “spot bonus” for taking on additional duties in the year 2004 when he did not have a manager. Also in 2005, plaintiff was the recipient of settlement proceeds as a class member in an action filed against defendant for unpaid overtime compensation and other relief.

According to the complaint, “[I]n or around January of 2006, [defendant] learned that the California Department of Insurance . . . intended to conduct an examination of its underwriting and claims practices, or a Market Conduct Examination.” In March 2006, defendant’s internal auditors conducted an audit of its La Mirada office. The auditors discovered problems with the administration of employee performance reviews. The auditors discovered that defendant had wrongfully used certain statistical claims settlement data which “appear[ed]” to create incentives to underpay claims. There were two types of statistical data kept by defendant which appeared to give its employees incentives to underpay claims. The first kind of data indicated how often claims representatives applied comparative negligence principles to personal injury claims. The second statistic indicated how often claims representatives were able to achieve settlements within a range suggested by a computer software program known as Colossus.

Plaintiff alleged that he had “an expectation of continued employment” as long as he satisfactorily performed his duties. Plaintiff alleged: defendant had a formal employment policy limiting its right to discharge without cause which was detailed in a manual provided to employees; defendant utilized a five-step procedure when disciplining employees; the first step was the use of verbal counseling which was followed by a counseling memorandum; if these first steps failed to correct the problem, the employee would be given a formal warning then placed on probation; and only then was an employee discharged. This employment policy limited defendant’s authority to discharge an employee without cause.

On March 29, 2006, Mr. Dye gave plaintiff a formal warning. The warning involved a November 2004 decision where defendant wrongfully refused to cover a claim. Plaintiff signed the formal warning. But when doing so, Mr. Dye told plaintiff not to date the warning. The formal warning was given without either verbal counseling or the issuance of a counseling memorandum. It was further alleged that: the warning was given within one or two days of the aforementioned internal audit; plaintiff had been “the first to discover the situation and to refer the matter to obtain a coverage opinion”; and the claims representative handling the file along with the representative’s supervisor had the authority to deny coverage.

On March 30, 2006, Jim Peters, defendant’s Southern California Division Manager, John Gonzales, a human resources representative, Mr. Dye, and plaintiff attended a meeting. Plaintiff was asked whether he received April 2005 email detailing changes in the administration of performance reviews for claims representatives. Mr. Dye had allegedly sent the email. Plaintiff denied receiving the email. In April 2005, Mr. Dye received an email from Terry Fleckenstein detailing changes in how performance reviews for claims representatives were to be conducted, along with an attachment. Mr. Dye was to forward the email to appropriate personnel. Plaintiff never received the text of the email. Rather, plaintiff only received the attachment from Mr. Dye. Plaintiff was terminated on April 10, 2006. Plaintiff was advised he had wrongfully used certain statistical data in two respects. First, plaintiff had misused data that showed how often claims representatives had used applied comparative negligence principles in resolving personal injury claims. Second, plaintiff had misused data that showed how often claims representatives achieved settlements within a range suggested by the Colossus system.

Plaintiff alleged that prior to April 10, 2006, he had never been advised of any “senior management directive” to alter the manner in which performance reviews were to be conducted. Plaintiff alleged that he was terminated on the pretext that he had failed to comply with the directive after never having received it. Plaintiff alleged he was terminated as a “scapegoat” in response to the ongoing Department of Insurance investigation in order to reduce a fine.

In the defamation cause of action, plaintiff sought damages for statements made at the April 10, 2006 meeting and in writing in a letter signed by Mr. Peters. The statements and letter stated that plaintiff had failed to comply with a senior management directive. The letter further stated plaintiff’s conduct “reflected a general disregard for the Company’s interest and its employees.” The statements were allegedly made to a number of defendant’s employees with knowledge they were untrue. The statements thereby accused plaintiff of being dishonest and incompetent.

B. The Summary Judgment Motion And Opposition

1. Overview

After answering the complaint, defendant filed a summary judgment motion. Defendant argued: plaintiff was an at-will employee which he acknowledged by his signature on at least five occasions, one of which occurred just two months before he was terminated; defendant had good cause to terminate plaintiff; and plaintiff was not terminated in order to make him a scapegoat or in retaliation for opting into the class action. Defendant also argued the alleged defamatory statements were subject to the common interest privilege, true, opinion, and reasonably and justified.

2. The termination

Defendant contended that the following facts were undisputed. On July 6, 1990, plaintiff signed an employment application stating his term of employment was not for any stated period and he could be terminated at anytime. Plaintiff signed acknowledgments his employment was at-will on at least five occasions: July 20, 1994; December 7, 2000; February 17, 2003; February 17, 2005; and February 28, 2006. The February 17, 2005 document states: “I acknowledge and agree that my employment at the Company is ‘At-Will.’ This means that both I and the Company have the right to terminate my employment at any time with or without advance notice, and with or without cause. The Company also has the right to make decisions regarding other terms of employment at any time with or without cause or notice, including but not limited to, promotion, demotion, discipline, transfer, compensation, benefits, duties and location of work. . . . [¶] I understand and agree that the Company has the right in its sole discretion to modify or rescind any policies, benefits, or practices, whether described in the handbooks or elsewhere, at any time without prior notice to me. I also understand and agree that my employment at-will status can only be altered in writing by an authorized Company officer.”

Two months before he was terminated, plaintiff signed the February 28, 2006 document which states: “I acknowledge and agree that my employment at the Company is ‘At-Will.’ This means that both I and the Company have the right to terminate my employment at any time, with or without advance notice, and with or without cause. The Company also has the right to make a decision regarding other terms of employment at any time with or without cause or notice, including, but not limited to, promotion, demotion, discipline, transfer, compensation, benefits, duties and location of work. I also understand and agree that my employment ‘At-Will’ status can only be altered in writing by the Vice President of Human Resources Services or designee.”

Plaintiff did not have a written employment contract. Further, he was never told that he would be employed for any specified period of time. Plaintiff was not told that he could only be terminated for cause. Defendant’s employee handbook states in several places that all employment is at-will.

Mr. Peters, defendant’ Southern California Division Manager, and Linda Nelson, an Assistant Vice President of Claims Field Operations for California, filed declarations. Mr. Peters’ duties included overseeing the La Mirada claims service center. Ms. Nelson was Mr. Peters’ supervisor.

According to Ms. Nelson in 2003, she established key performance indicators to measure performance respecting liability claims. Ms. Nelson stated that the “key performance indicators” of “comparative negligence and Colossus” were not to be used “as targets” in personnel evaluations of individual claims representatives. Rather, the comparative negligence and Colossus system figures were to be used for tracking purposes on an office-wide basis and for individuals in an effort to identify trends, training needs, and internal quality assurance audits. In early 2005, it came to Ms. Nelson’s attention that the performance and planning reviews for liability claims representatives in California contained potentially inappropriate language regarding comparative negligence and the Colossus system. As a result, Ms. Nelson and other senior management created a standardized form to be used throughout the state. Prior to that time, the forms varied statewide among regions and offices. The form was standardized to assure the elimination of inappropriate individual evaluations of claims representatives based on comparative negligence and the Colossus system. The revised performance and planning review form was “rolled out” in April 2005. The revised April 2005 form provides in part: “Because our overall goal in Claims handling is to pay what we owe—no more, no less. [Defendant’s] employees should not establish an individual goal in support of Overall Company Goal #1.” (Original italics.) The language in the immediately preceding quotation appeared twice on defendant’s statement of organizational goals. The first goal identified on the form was profitable growth. The key performance indicators section of the April 2005 revised form makes the following references to comparative negligence and the Colossus system: “5. 3rd party BI Comparative Negligence %, expectation is to apply comparative negligence when present and take an appropriate amount. Measured by 3rd party injury units with comparative negligence and internal quality assurance audits. [¶] 6. Proper Colossus usage. Expectation is to properly utilize Colossus for 3rd party BI claims [and] effectively negotiate settlements. Settlements outside the Colossus range need to be well supported with valid external factors.”

Mr. Dye distributed the April 2005 revised performance evaluation forms to the managers and supervisors in his office. At his deposition, plaintiff expressly admitted receiving the revised form in April 2005: “[Mr.] Dye printed them out. He gave them to all the supervisors to change it out in their employees’ [personnel evaluations.]” Upon receiving the revised forms, plaintiff was sure he read them and noticed there had been changes to them, as was typical. Plaintiff denied receiving an email concerning the revised forms sent by Mr. Fleckenstein. But plaintiff admitted seeing the forms which were attached to Mr. Fleckenstein’s email. Further, plaintiff admitted he received an email containing Mr. Dye’s minutes of the April 25, 2005 meeting. Mr. Dye’s minutes refer to the new performance review policies. Also at his deposition, plaintiff admitted performance reviews were not to be based on deviations from the Colossus system.

On December 9, 2005, a business review meeting was held and attended by supervisors and managers from the Orange and La Mirada branch offices. Among the attendees were Mr. Peters, Ms. Nelson, Mr. Dye, and plaintiff. During the meeting plaintiff made a presentation. While doing so, plaintiff stated he held claims representatives personally responsible during weekly meetings for their use of comparative negligence principles. Ms. Nelson interrupted plaintiff and explained that it was improper and directly contrary to defendant’ policy to not evaluate claims representatives based on their reliance on comparative negligence principles and the Colossus system.

In January 2005, Mr. Peters and Ms. Nelson attended an annual statewide “Driving Results” conference. The annual conference is generally attended by senior management, managers, and supervisors where results and expectations for the coming year are discussed, as well as any new policies and directives. At the January 2005 conference, the subject of the proper use of statistics regarding comparative negligence determinations or settlement of claims within ranges suggested by the Colossus system was discussed. These statistics were not to be used in personnel evaluations of claims representatives. Ed Reis, who was Ms. Nelson’s predecessor, emphasized that, as part of the performance evaluation process, there should be no setting of individual goals for use of comparative negligence principles and the Colossus system. Rather, Mr. Reis stated, the use of comparative negligence principles and Colossus system should not be the basis for personnel evaluations. A claims representative need only document the reasons for settling above or below the figure recommended by the Colossus system. Ms. Nelson declared, “Following this conference, I understood that [defendant’s] policy was not to evaluate the performance of claims representatives based on individual targets for comparative negligence and [the] Colossus [system].”

In February 2006, Mr. Peters and Ms. Nelson learned that an error occurred under plaintiff’s supervision regarding the denial of coverage of an insured’s claim. The error in evaluating coverage, which could have exposed defendant to hundreds of thousands of dollars in liability, occurred in November 2004. Plaintiff requested authority from the California coverage manager, Tom Ward, to deny coverage to an insured under a policy issued by defendant. Mr. Ward identified a second policy held by the insured that might provide coverage. Plaintiff was instructed to investigate whether there was coverage under the second policy. Plaintiff never followed the directions given by Mr. Ward to investigate the second policy and coverage was denied. In January 2006, the insured’s counsel contacted defendant and asked for confirmation of coverage under the second policy. Defendant investigated and found there was coverage under the second policy. Ms. Nelson told Mr. Peters that plaintiff required, what her declaration termed, a “performance management.” Mr. Peters then directed Mr. Dye to provide plaintiff with a formal written warning regarding the coverage issue.

On March 28, 2006, Mr. Peters and Ms. Nelson learned that a random internal audit of the La Mirada office showed that the 2005 year end performance evaluations of claims representatives’ “individual targets” contained improper references to how often they found comparative negligence was present and settled claims within ranges suggested by the Colossus system. Ms. Nelson subsequently initiated a statewide review of 2005 year-end performance reviews for claims representatives for each of the 15 California offices. The investigation revealed widespread problems in four of the offices. It was determined that individual office management would be held responsible.

On April 5, 2006, Mr. Peters met with plaintiff. During the meeting, plaintiff was asked if he was aware that defendant’s policy was not to use claims representatives’ “individual results for comparative negligence and Colossus” in performance and planning reviews. Plaintiff stated that he was unaware of the policy and thought everything was about individual results and matrices. When asked why he did not comply with Ms. Nelson’s instruction to him at the December 9, 2005 business review meeting, plaintiff said he was not sure what she had said. Plaintiff denied ever receiving an email from Mr. Dye on the subject. Plaintiff did not deny that he had approved the improper reviews of claims representatives.

Mr. Peters spoke to an employee who attended the 2005 Driving Results conference where the policy was discussed. The policy is also listed at a “portal/intranet” for employees, which all managers have access to which is entitled “Employee Dashboard” which has a section captioned “Heard at the Watercooler.” Managers are expected to review the website including the “Heard at the Watercooler” section.

On April 6, 2006, Mr. Peters requested permission to terminate plaintiff. Ms. Nelson’s approval was necessary in that plaintiff had worked for defendant for more than five years. Plaintiff was terminated on two grounds. First, he was already subject to a formal warning as a result of the February 2006 coverage error. Second, he knew or should have known of senior management’s directive not to evaluate the performance of claims representatives based on their individual targets which considered comparative negligence and the Colossus system. Mr. Peters and Ms. Nelson denied plaintiff was terminated because of his participation in the class action. They both declared they were unaware plaintiff was a class member when the termination decision was made. Mr. Peters and Ms. Nelson denied plaintiff was terminated due to the Department of Insurance investigation as neither of them had any involvement with the probe.

Defendant disciplined three other employees for the same erroneous use of comparative negligence and the Colossus system in conducting performance and planning reviews. Two were demoted to non-management positions. Plaintiff was terminated because he was the only employee who was already subject to a formal disciplinary warning. Three employees were not disciplined because two had already left the company. The remaining employee had been transferred out of claims operations and was no longer under Ms. Nelson’s chain of command. Thus, no discipline was imposed on the third employee.

3. Defamation

With regard to the defamation claim, plaintiff alleged in the complaint that oral statements were made in an April 10, 2006 meeting he had failed to comply with a senior management directive. This same statement was made in writing in a April 7, 2006 letter signed by Mr. Peters. Defendant presented evidence the challenged statements were only made to its employees. Defendant cited plaintiff’s deposition testimony that he knew that the Colossus system was not to be used for any individual performance reviews. However, plaintiff used Colossus system comparisons in making the December 2005 performance evaluations.

4. The opposition

Plaintiff opposed the summary judgment motion. The following recitation of facts consists only of those to which no objections were interposed or, if defendant objected, the trial court admitted the evidence. Plaintiff admitted that he did not have a written employment contract. Plaintiff argued defendant had an acknowledged policy and actual custom and practice of not terminating employees without cause. Defendant’s Employee Handbook and Human Resources Procedures Manual describes a policy of “Progressive Discipline” including counseling, formal warning, and probation. A portion of the employee handbook states, “Because the Company is a growing and changing organization, it reserves full discretion to add to, modify, or delete provisions of this handbook, or the policies and procedures on which they may be based, at any time without advance notice.” Plaintiff disputed whether he signed all of the acknowledgements regarding the at-will nature of his employment. Rather, plaintiff claimed one of the documents contained his forged signature. He also testified at his deposition that he did not recall signing most of the documents.

Plaintiff also relied on the declaration of his former supervisor, Carolyn Hopkins. Ms. Hopkins declared that she worked for defendant for 27 years until she retired in 2003. At the time of her retirement, she was the Service Center Manager for the La Mirada office. Plaintiff began working under Ms. Hopkins’ supervision in 1996 at the Commerce office where she was employed as the Branch Claims Manager. In 2000, plaintiff became the Liability Claims Manager for the La Mirada office. Ms. Hopkins declared: “In or around 1997, I was instructed by [defendant] to have my employees sign a document acknowledging their at-will status. I could not in good faith carry out this instruction until I spoke with the Vice President of Human Resources to ascertain the effect that this document would have [on] the employment status of my employees. He assured me that the document was merely a formality that would not change [defendant’s] practice that employees could only be terminated with cause. I was also informed that all employees had to sign the document, and that they would like to be informed if an employee refused to do so.” Ms. Hopkins claims that she retired in part due to her feelings that defendant “was placing unrealistic expectations” on her employees by forcing them to meet newly enacted goals called Key Performance Indicators.

Plaintiff declared that he received a raise every year while he was employed by defendant from 1990 until April 2006. He always understood that he could only be terminated for doing something wrong during his employment. He was told this at numerous meetings and on an employee website. When Ms. Hopkins instructed plaintiff to sign the Employee Acknowledgement Form, she told him that: all employees were required to sign the form; his signature would not alter defendant’s practice of termination for cause; nor would his signature would otherwise affect his employment. When plaintiff was terminated, he was told he was being terminated for cause. Plaintiff declared, “John Gonzales, Human Resources Manager, specifically told me that I could only be terminated for cause, and that Defendant was terminating me for cause.”

Plaintiff stated that he was present at the January 2005 “Driving Results Conference.” However, he denied that he was instructed to use the office’s average “as to” key performance indicators, including comparative negligence and the Colossus system while preparing performance planning and reviews. Plaintiff declared there was no discussion regarding performance planning and reviews at the January 2005 conference. Throughout the year he was instructed to hold claim adjusters individually accountable for the results. He also cited deposition testimony from Bridget Nathan who was at the December 2005 meeting. Ms. Nathan recalled that plaintiff was making a presentation and was interrupted by Ms. Nelson. Ms. Nelson discussed comparative negligence but did not mention performance reviews when she interrupted plaintiff’s presentation.

Plaintiff denied he was ever directed to review the “Employee Dashboard” web page which contained the directive for which he was terminated. Plaintiff also denied that he ever received the April 2005 email that contained the directive. According to plaintiff: “When [Mr.] Peters specifically asked me about this I unequivocally advised him that I had not received it. [Mr.] Dye also asked me if I had received the email. When I told him that I had not, he said he believed that he never forwarded it to me.”

With respect to the December 2005 “Business Review” meeting, plaintiff denied that Ms. Nelson provided any instructions regarding performance planning and reviews. Plaintiff stated that she had never given him any guidance on how to complete performance planning and reviews. Plaintiff declared that, if he had been instructed not to do so, he would have followed the instructions.

With respect to the March 29, 2006 formal warning, plaintiff stated he never received any discipline prior to that date. Plaintiff stated he was the employee who uncovered the November 2004 coverage determination error for which he was disciplined. The error was made by the adjuster and the supervisor who handled the claim. Plaintiff was advised he was being terminated for receiving and failing to follow the senior management directive thereby violating Department of Insurance regulations, which broke the law. Plaintiff was also told he was terminated for lying about receiving the directive. Plaintiff declared, “Mr. Peters also told me that the [Department of Insurance] violations caused exposure to [d]efendant because of the ongoing investigations into [its] claims practices, i.e. the market conduct survey.” Plaintiff declared, “Defendant . . . had been forcing the entire company to hold claims adjusters individually accountable for their results as to comparative negligence and Colossus.” The only directive he was given by defendant was to hold claims adjusters individually accountable for their use of comparative negligence and the Colossus system. Plaintiff declared: “To ensure that everyone understood this policy, senior management mandated each office to create ‘whiteboards’ that were placed in common areas of the office and continually updated to show each employee’s individual [key performance indicators] results. Mr. Peters created a scorecard that matched the categories on the [performance planning and reviews], and which ranked all employees based on their individual [key performance indicator] results; this too was placed in an area for the whole office to see. The forms that my office used for the [performance planning and reviews] were provided by senior management outside of my office. The management team at my office executed and administered these reviews as we had done the years prior as we had received no instruction to change the process.” Plaintiff was a party to the class action lawsuit filed against defendant. Plaintiff was compensated for overtime after defendant lost the class action case.

5. The reply

In reply, defendant noted: plaintiff had admitted that he had no written employment contract; plaintiff admitted no one had made any written or oral statements to him that he would be employed for a specified period of time; he had no recollection of any person ever discussing with him that he could only be terminated for cause; no one ever discussed with him the grounds upon which his employment could be terminated; and he understood he could quit his employment at anytime. Defendant also pointed out Ms. Hopkins’ declaration does not state that she ever told plaintiff that he would only be terminated for cause. Further, at his deposition, plaintiff admitted he never read anything prepared by defendant stating he could only be terminated if there was cause to do so. Further, at his deposition the following occurred: “Q. During your employment with [defendant], did anyone at [defendant] ever discuss with you the grounds upon which your employment could be terminated? [¶] A. No, I never had such a discussion. [¶] . . . Q. . . . Was it also your understanding that [defendant] could terminate you employment at anytime. [¶] A. They did, yes.”

Defendant also claimed that the evidence showed that there was good cause to terminate Plaintiff. Defendant cited: plaintiff’s admission in his deposition that he was partly aware of the directive; the December 2005 evaluation which did not follow the revised directive; the January 2005 “Driving Results” Conference; the Employee Website; and the December 2005 business review meeting wherein Ms. Nelson interrupted plaintiff’s presentation to discuss defendant’s policy against holding claims representatives to individual goals for comparative negligence and the Colossus system.

6. The ruling

The trial court ruled on defendant’s evidentiary objections. As to the merits of the summary judgment motion, the trial court ruled: “Plaintiff’s first cause of action for breach of contract and fourth cause of action for breach of implied covenant of good faith and fair dealing fail because Plaintiff’s employment with Defendant was terminable at-will as a matter of law. . . . [¶] Plaintiff’s second cause of action for wrongful termination in violation of public policy, premised on Plaintiff’s allegedly being terminated as a ‘scapegoat,’ fails as a matter of law because Plaintiff did not engage in any protected activity. This claim also fails on the separate and independent basis that Plaintiff has not presented any admissible evidence that his termination was to ‘scapegoat’ him and therefore it did not violate any public policy. [¶] Plaintiff’s third cause of action for wrongful termination in violation of public policy, premised on Plaintiff allegedly being terminated for his participation in a prior class-action lawsuit against Defendant, fails as a matter of law because Plaintiff did not engage in any protected activity. This claim also fails on the separate and independent basis that Plaintiff has not presented any admissible evidence that his termination was in retaliation for his being a participant in a prior class-action lawsuit. [¶] Plaintiff’s fifth cause of action for defamation fails as a matter of law because there is no admissible evidence that any defamatory statements about him were ever published. On a separate and independent basis, this claim also fails because the alleged defamatory statements were subject to the common-interest privilege and there is no evidence they were made with malice.” Judgment was entered on July 11, 2007, which was followed by this timely appeal.

III. DISCUSSION

A. The Standard of Review

In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, the Supreme Court described a party’s burdens on summary judgment or adjudication motions as follows: “[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . . [¶] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]” (Fns. omitted, see Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 871, 878.) We review the trial court’s decision to grant the summary judgment motion de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68; Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1188, disapproved on another point in Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19.) The trial court’s stated reasons for granting summary judgment are not binding on us because we review its ruling not its rationale. (Continental Ins. Co. v. Columbus Line, Inc. (2003) 107 Cal.App.4th 1190, 1196; Dictor v. David & Simon, Inc. (2003) 106 Cal.App.4th 238, 245.) In addition, a summary judgment motion is directed to the issues framed by the pleadings. (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1252; Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673; superseded by statue on a different point as stated in Saelzler v. Advanced Group 400 (2001) 24 Cal.4th 763, 767.) Those are the only issues a motion for summary judgment must address. (Ibid.; Goehring v. Chapman University (2004) 121 Cal.App.4th 353, 364.)

B. There Are No Triable Issues of Material Fact.

1. The implied contract claims are barred as a matter of law.

Plaintiff argues that triable issues of material fact exist as to whether he was wrongfully discharged in violation of implied company policies to only terminate for cause and by assurances from his supervisors that he would remain employed as long as there was no cause to dismiss him. These claims are raised in the first and fourth causes of action. Plaintiff relies on: testimony by a former supervisor and Mr. Gonzales; the absence of other employee dismissals based on other than good cause; and a reference on defendant’s website to the general requirement that cause must be present before an employee may be discharged. Yet plaintiff on at least five or more occasions signed documents acknowledging his at-will employment status.

A similar issue was addressed in Starzynski v. Capital Public Radio, Inc. (2001) 88 Cal.App.4th 33, 37-38 which explained: “Labor Code section 2922 provides: ‘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.’ [¶] ‘Labor Code section 2922 establishes the presumption that an employer may terminate its employees at will, for any or no reason. A fortiori, the employer may act peremptorily, arbitrarily, or inconsistently, without providing specific protections such as prior warning, fair procedures, objective evaluation, or preferential reassignment.’ (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 350.) [¶] ‘Labor Code section 2922, which provides that an employment relationship of unspecified duration may be terminated at the will of either party, establishes a presumption of at-will employment. This presumption may be overcome by evidence of an implied agreement that the employment would continue indefinitely, pending the occurrence of some event such as the employer’s dissatisfaction with the employee’s services or the existence of a cause for termination. (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 680.) “[F]actors apart from consideration and express terms may be used to ascertain the existence and content of an employment agreement, including 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.” [Citation.]’ [Citations.]” [¶] “However, ‘“[t]here cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results.” [Citations.] The express term is controlling even if it is not contained in an integrated employment contract. [Citation.] Thus, the ... at-will agreement precluded the existence of an implied contract requiring good cause for termination.’ [Citations.] The California Supreme Court recently observed in dictum that most California cases ‘have held that an at-will provision in an express written agreement, signed by the employee, cannot be overcome by proof of an implied contrary understanding. [Citations.]’ (Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 340, fn. 10, original italics.)” (Starzynski v. Capital Public Radio, Inc., supra, 88 Cal.App.4th at pp. 37-38.)

Likewise, in this case, plaintiff signed acknowledgments on no less than five occasions that his employment was at-will. Two months before he was terminated plaintiff signed such a document on February 28, 2006. As noted, plaintiff signed the following document: “I acknowledge and agree that my employment at the Company is ‘At-Will.’ This means that both I and the Company have the right to terminate my employment at any time, with or without advance notice, and with or without cause. The Company also has the right to make a decision regarding other terms of employment at any time with or without cause or notice, including, but not limited to, promotion, demotion, discipline, transfer, compensation, benefits, duties and location of work. I also understand and agree that my employment ‘At-Will’ status can only be altered in writing by the Vice President of Human Resources Services or designee.” Thus, plaintiff acknowledged that his employment was at-will. Further, plaintiff acknowledged that only the human resources vice president could alter that at-will status and only in a writing. Plaintiff’s assertion that he was given oral assurances to the contrary cannot create an implied contract which directly contradicts his written acknowledgement of at-will employment. To the extent he claims Ms. Hopkins or other persons orally said anything to the contrary, it is irrelevant in light of the plaintiff’s repeated written confirmations of his at-will status. Plaintiff’s employment was at-will; as a result, defendant could terminate him with or without cause. (Lab. Code, §2922; Dore v. Arnold Wordwide, Inc. (2006) 39 Cal.4th 384, 389; Guz v. Bechtel National, Inc., supra, 24 Cal.4th at p. 350; Starzynski v. Capital Public Radio, Inc., supra, 88 Cal.App.4th at pp. 37-38.) The trial court correctly ruled the first cause of action for breach of implied contract to terminate only for good cause was without merit.

Because of his at-will status, plaintiff’s contention that his termination breached the implied covenant of good faith and fair dealing has no merit. In Starzynski, the Court of Appeal explained, “The covenant of good faith and fair dealing cannot impose substantive terms and conditions beyond those to which the parties actually agreed.” (Starzynski v. Capital Public Radio, Inc., supra, 88 Cal.App.4th at p. 39 citing Guz v. Bechtel National, Inc., supra, 24 Cal.4th at pp. 348-353.) Accordingly, the trial court properly dismissed the fourth cause of action for breach of the implied covenant of good faith and fair dealing.

2. There is no merit to plaintiff’s public policy violation causes of action.

Plaintiff claims he was terminated in violation of public policy. Plaintiff was required to show: he was terminated in violation of a fundamental public policy; the policy was beneficial to the public; and the policy was embodied in a statute or constitutional provision. (Turner v. Anheuser-Busch, Inc, supra, 7 Cal.4th at p. 1256; accord Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889.) The four categories that typically subject an employer to liability for retaliation arise when the employee: refuses to violate a statute; performs a statutory obligation; exercises a statutory right or privilege; or reports a violation of a statute. (Ibid.; Turner v. Anheuser-Busch, Inc., supra, 7 Cal.4th at p. 1256.) Plaintiff argues his wrongful termination in violation of fundamental public policy claim is supported by: the policy prohibiting unfair or deceptive insurance practices as articulated in Insurance Code section 790; the policy in Insurance Code section 816 prohibiting compensation of adjuster based on the amount of a settlement; the public policies requiring prompt payment of wages (Lab. Code, § 204); and the prohibition against “slavery.” (Cal. Const., art. 1, § 6).

However, plaintiff failed to produce any evidence he was discharged under any of the four categories identified by our Supreme Court. Defendant presented evidence plaintiff was terminated because he improperly utilized comparative negligence and the Colossus system in staff evaluations. The only evidence was that in April 2005 defendant changed its format for conducting employee evaluations which indicated that comparative negligence and the Colossus system were not to be used in appraising staff conduct. There is no litigable dispute that plaintiff received the form. He admitted he did so at his deposition. Plaintiff may not contend otherwise. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22; Benavidez v. San Jose Police Department (1999) 71 Cal.App.4th 853, 861-862.) Similarly, plaintiff admitted at his deposition the Colossus system was not to be used as part of the claims representative evaluation process. This shifted the burden of production to present specific facts he was discharged in violation of a fundamental public policy. (Code Civ. Proc., § 437c, subd. (p)(2); Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 490; Wiz Technology, Inc. v. Coopers & Lybrand (2003) 106 Cal.App.4th 1, 11.) Plaintiff produced no evidence that he: refused to violate a statute; performed a statutory obligation; exercised a statutory right or privilege; or reported a violation to anyone.

There is no evidence plaintiff’s class action participation was in any manner connected to his termination. There was evidence he received a check in the mail in 2005. Plaintiff was not a named litigant in the class action. According to his testimony, he was one of “thousands” of defendant’s employees who were class members. In addition, Mr. Peters and Ms. Nelson made the decision to terminate plaintiff. Both declared that they were unaware of plaintiff’s status as a class member until after the current lawsuit was filed. Accordingly, there were no specific facts presented that plaintiff’s termination was based on his participation in the class action lawsuit nor that he was fired in violation of any public policy.

3. There is no merit to plaintiff’s defamation cause of action.

With respect to the defamation cause of action, the complaint alleges, “Plaintiff . . . . had failed to comply with a senior management directive, conduct which ‘reflected a general disregard for the Company’s interest and that of its employees,’ thereby accusing [p]laintiff . . . of a lack of integrity, dishonesty, incompetence and/[]reprehensible personal characteristics or behavior.” Defamation requires proof of an intentional publication of a false and unprivileged statement. (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 104; ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1010; Smith v. Maldonado (1999) 72 Cal.App.4th 637, 645.)

Applying the summary judgment standards of review, we agree with defendant there is not triable issue at whether challenged statements were true. Plaintiff was provided the new rules for employee evaluations. We agree with defendant that plaintiff’s discovery admissions prevent him from contradicting his concession he received the new rules which prohibited use of comparative negligence and the Colossus system in employee evaluations. Plaintiff violated company policy by approving employee evaluations that took into account comparative negligence and the Colossus system. In fact plaintiff admitted at his deposition he knew he could not rely on the Colossus system in staff evaluations. Such misconduct does reflect a general disregard for corporate policies. The revelation of such truthful matters to other employees is not tortious.

IV. DISPOSITION

The judgment is affirmed. Defendant, Farmers Insurance Exchange, is awarded its costs on appeal from plaintiff, Robert J. Libby.

We concur: ARMSTRONG, J. MOSK, J.


Summaries of

Libby v. Farmers Ins. Exchange

California Court of Appeals, Second District, Fifth Division
Jun 17, 2008
No. B201508 (Cal. Ct. App. Jun. 17, 2008)
Case details for

Libby v. Farmers Ins. Exchange

Case Details

Full title:ROBERT J. LIBBY, Plaintiff and Appellant, v. FARMERS INSURANCE EXCHANGE…

Court:California Court of Appeals, Second District, Fifth Division

Date published: Jun 17, 2008

Citations

No. B201508 (Cal. Ct. App. Jun. 17, 2008)