From Casetext: Smarter Legal Research

Fernandes v. Krabbe

California Court of Appeals, Second District, Eighth Division
Feb 13, 2008
No. B190488 (Cal. Ct. App. Feb. 13, 2008)

Opinion


ROOSEVELT A. FERNANDES, Plaintiff and Appellant, v. KURT P. KRABBE et al., Defendants and Respondents. ROOSEVELT A. FERNANDES, Plaintiff and Appellant, v. SOUTHERN CALIFORNIA EDISON COMPANY, Defendant and Respondent. B190488 California Court of Appeal, Second District, Eighth Division February 13, 2008

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

APPEAL from judgments of the Superior Court of Los Angeles County Super. Ct. Nos. GC033559, BC327618, Jan A. Pluim, Judge.

Douglas N. Silverstein and Alexandra M. Steinberg for Plaintiff and Appellant.

William Davis Harn for Defendant and Respondent Southern California Edison Company.

John A. Demarest for Defendants and Respondents Kurt P. Krabbe and Linda Krabbe.

FLIER, J.

Appellant Roosevelt A. Fernandes filed consolidated actions against respondents Southern California Edison Company (SCE) and Kurt and Linda Krabbe (Krabbe) after being terminated from SCE’s employment. The trial court entered summary judgments for respondents and appellant appeals.

Both Kurt Krabbe and Linda Krabbe are alleged to have made defamatory statements to SCE that resulted in appellant’s employment termination. For purposes of discussion, we use “Krabbe” interchangeably to refer to the Krabbes jointly and Kurt Krabbe individually.

Among other things, appellant contends the trial court erred in granting summary judgment to SCE because there are triable issues of fact as to the nature of his employment, whether SCE had good cause to terminate his employment and whether SCE promised to buy his preemployment patents. Appellant further contends that the trial court committed reversible error in denying his motion for new trial based on SCE’s alleged suppression of several documents that appellant had created. Appellant claims the court erred in granting summary judgment to Krabbe because damages were not an element of his claim for defamation, truth was not a defense, and the court applied an erroneous standard for causation. Appellant additionally contends the trial court reversibly erred in denying mandatory relief from the summary judgments due to his attorney’s mistake, inadvertence, or neglect and his motion for reconsideration.

Finding no error, we affirm.

FACTS

In April 1989, appellant applied for a job as a research engineer with SCE. On April 27, 1989, he submitted a written application to SCE that certified, directly above his signature, the following: “I understand that my employment may be terminated by either the company or me at any time, without advance notice, with or without good cause.” On April 28, 1989, appellant completed a security questionnaire containing the identical certification in a box directly above his signature.

On April 28, 1989, appellant also executed an agreement with SCE, effective June 1, 1989, entitled “Terms and Conditions of Employment” (employment agreement). The employment agreement provided that “either Employee or the Company may terminate this Agreement at any time and for any reason, on written notice to the other party.” The employment agreement further contained an integration clause that stated: “This Agreement contains the entire agreement between the parties, and both parties agree that there are no additional oral, collateral, or implied agreements of any kind.”

Appellant started working for SCE in June 1989 as a senior research engineer in the research and development department. In February 1999, SCE distributed a human resources (HR) policy handbook to its nonunion employees, including appellant. SCE HR policy No. 201 stated, “SCE is an at-will employer and any employment relationship may be severed at any time, with or without notice, and with or without cause . . . .” SCE also circulated a conflict of interest policy, with which appellant admittedly was familiar.

SCE’s conflict of interest policy states, in pertinent part, that “[e]mployees are expected to exercise good judgment and maintain high ethical standards in the course of their dealings with outside persons and entities, so as to preclude the possibility of a conflict between the interests of the Company and their own personal interests.”

About September 1990, appellant submitted to SCE a proposal for SCE to license patents that appellant had developed, obtained, or applied for before applying for work at SCE (preemployment patents). Appellant apparently received no response from SCE to this proposal. In November 1990, appellant again proposed that SCE buy his preemployment patents. He proposed to license the patents to SCE for $375,000 and submitted a purchase order requisition for him to do work necessary to perfect his title to the patents. SCE turned down appellant’s offer and purchase order requisition. In July 1997, SCE wrote to appellant, proposing to license several of his preemployment patents for $75,000.

Appellant rejected SCE’s offer and made a written counteroffer in July 1997. SCE did not respond to the counteroffer, and it never acquired any of appellant’s preemployment patents.

As of 2000, appellant was manager of an ultra small antenna terminal (USAT) project for SCE with responsibilities including the requisition and management of supply contracts for the project for SCE. SCE began to have difficulties with the existing supplier, who was unable to meet its commitments for the project.

Appellant began to seek a reliable manufacturing source to produce antennae, terminals and other equipment required by SCE. Respondent Krabbe owned Wasatch Aerospace Company (Wasatch Aerospace), and Steve Ow owned a company called TriOw. Starting about July 2002, appellant began to work with Wasatch Aerospace and TriOw to establish a new company to better meet SCE’s need for timely delivery of equipment for the USAT project.

With appellant’s assistance, TriOw and Wasatch Aerospace merged to form Mica-Tech in approximately November 2002. As a merged entity, Mica-Tech took over fulfillment of the USAT contracts. SCE was Mica-Tech’s sole customer.

In August 2002, appellant reached an agreement in principle with Ow for appellant to license his preemployment patents. In November 2002, appellant executed an agreement to license those patents with Steven Ow of TriOw. Between November 2002 and December 2003, appellant received $275,000 in licensing fees from Ow, Tri-Ow, or Mica-Tech. During the same period, appellant arranged for Wasatch Aerospace or Mica-Tech to receive from SCE purchase orders for equipment and service totaling about $2.5 million.

In December 2003, respondent Krabbe had a disagreement with Ow and resigned from Mica-Tech. After resigning, Krabbe wrote SCE a letter suggesting that SCE examine the relationship between Mica-Tech and appellant.

SCE initiated an investigation after receiving Krabbe’s letter and appointed a senior corporate auditor and a senior investigator from the corporate security department to conduct the investigation. The investigators interviewed a number of persons and obtained documents from Krabbe, Ow, Mica-Tech, Wasatch Aerospace, and TriOw. After gathering facts from these sources, the investigators interviewed appellant regarding an alleged conflict of interest.

In December 2003, appellant provided SCE with a written statement of his “interpretation and point of view” prepared by the investigators based on their interview with appellant.

Among other things, appellant stated that “my actions all along were to mutually benefit the company and not just myself.” Appellant’s signature on the statement was witnessed by both investigators. Appellant acknowledged in his statement, “I voluntarily provide this statement consisting of five pages. It is true and correct to the best of my knowledge. No promises or threats have been made to me and no coercion of any kind has been applied. I want SCE to understand my interpretation and point of view regarding this allegation of a conflict of interest.”

Based on a review of SCE policy, appellant’s signed statement, witness interviews, and documents provided during their investigation, the investigators made certain findings. The investigators reported their findings to Richard M. Rosenblum, a senior vice-president of SCE, in consultation with a managing attorney in SCE’s law department and SCE’s corporate auditor. After reviewing the investigative findings and appellant’s written statement, Rosenblum determined that appellant’s conduct had violated SCE’s conflict of interest policies. He believed that appellant had not shown appropriate integrity for an individual of his standing within the corporate structure of SCE and concluded that appellant’s employment should be terminated.

Among other things, the investigators concluded: (1) appellant was instrumental in the formation of Mica-Tech; (2) appellant sold 11 preemployment patents to TriOw in November 2002; (3) between November 2002 and December 2003, appellant received $275,000 in checks from TriOw, Mica-Tech and Ow, and he expected to receive future royalties of 10 percent of the sales price for all products with a minimum royalty fee of $60,000 per year commencing January 1, 2005; (4) from February 2002 through November 2003, appellant directed four purchase orders totaling $2.5 million to Wasatch Aerospace or Mica-Tech and two other purchase orders totaling $625,000 to Mica-Tech that had not yet been processed pending completion of the investigation; and (5) appellant did not inform his management of the sale of his preemployment patents to a vendor with which he had a business relationship until after Krabbe’s allegations had been received.

In January 2004, appellant was notified that SCE had decided to terminate his employment for violation of company policy. With Rosenblum’s approval, appellant was offered, and he accepted, the option to elect retirement in lieu of termination.

PROCEDURAL HISTORY

In March 2004, appellant filed an action against Krabbe. Appellant alleged that SCE terminated his employment because Krabbe had made written and oral defamatory statements about him to SCE. The alleged defamatory statements were to the effect that appellant had engaged in “unethical actions for purposes of personal enrichment and to the detriment of SCE.” Appellant asserted claims for libel, defamation, interference with prospective economic advantage, tortious inducement of breach of contract, and intentional infliction of emotional distress against Krabbe.

In January 2005, appellant brought a separate action against SCE, which later was consolidated with the suit against Krabbe. Appellant asserted causes of action for fraud, wrongful discharge in breach of an implied in fact contract, and wrongful discharge in breach of an implied covenant of good faith and fair dealing. He alleged that SCE had terminated his employment in violation of an implied contract not to terminate his employment without good cause and implied covenant of good faith and fair dealing. Appellant also claimed SCE fraudulently induced him to join SCE in 1989 by falsely promising during his employment interview that it would acquire his preemployment patents for $275,000 and a percentage of all royalties and that SCE would provide appellant with a job as a senior research engineer for the remainder of his career, promises SCE allegedly never intended to perform.

Appellant voluntarily dismissed additional claims for wrongful discharge on the basis of age discrimination, unfair business practices, and wrongful termination in violation of public policy.

SCE moved for summary judgment or, alternatively, summary adjudication of issues. SCE asserted, among other things, that the undisputed material facts established appellant’s employment was at-will pursuant to express written agreement, SCE terminated appellant’s employment because he failed to disclose a conflict of interest, and appellant’s claims are barred by the applicable statute of limitations. Krabbe also moved for summary judgment, on the grounds that the alleged defamatory statements were not the proximate cause of appellant’s damages and, in any case, the statements were true.

The trial court granted both motions for summary judgment and entered judgments for respondents. The court later denied appellant’s motion for reconsideration and motion for new trial. Appellant appeals from the judgments.

DISCUSSION

1. Summary Judgment for SCE

We independently review the trial court’s grant of summary judgment (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860) and review the trial court’s final rulings on evidentiary objections for an abuse of discretion (Carnes v. Superior Court (2005) 126 Cal.App.4th 688, 694).

A. Exclusion of Evidence

In opposing summary judgment, appellant contended his employment was not governed by the employment agreement but by another agreement, dated June 1, 1989, which obligated appellant to assign future intellectual property rights to SCE as a condition of his employment (assignment agreement).

The assignment agreement is confusingly entitled “Employment Agreement,” but the subject matter concerns “discoveries and inventions developed by an employee” during any employment by SCE.

Appellant asserted that the assignment agreement included a two-page attachment listing appellant’s preemployment patents, with the headings “Fernandes Patents for SCE Exclusive License” and “Fernandes Patents for Non-Exclusive Licensing to SCE.” Below a printed list of patents, the second page of the claimed attachment purported to contain notations, appellant’s initials and the date of “6/01/89,” all in appellant’s handwriting. The handwritten portion states, among other things: “Pre-employment and future patent assignment basis -- [¶] * Agree to assign at $275k cost plus royalty . . . for: [¶] -- SCE full time employment through retirement . . . .”

SCE admitted the genuineness of page one of the assignment agreement but objected to any admission of the proffered attachment. There was no dispute that page one of the assignment agreement was signed by appellant and two representatives of SCE. However, SCE objected to the alleged attachment that purported to include provisions in appellant’s handwriting for the purchase of his preemployment patents for $275,000 plus royalty and for “full time employment through retirement.”

The trial court ruled the purported attachment produced by appellant lacked foundation and was “neither competent nor admissible to prove the existence of any agreement modifying the expressly at-will nature of [appellant’s] employment set forth in an earlier integrated written agreement.” The court observed the proffered evidence was an “unauthenticated attachment which [bears] no one’s signature, nor anyone’s initials except [appellant’s] own, and further appears to be in [appellant’s] handwriting.” We agree that appellant failed to provide appropriate authentication for the attachment or show such evidence was reliable.

The two-page attachment proffered by appellant purported to list appellant’s pre-employment inventions as of June 1, 1989. SCE established that during discovery appellant produced several different versions of this document. One version purported to include inventions patented on August 8, 1989, January 16, 1990, and February 27, 1990, i.e., dates and patent numbers that did not even exist as of the date the assignment agreement was executed. The version of the purported attachment that appellant presented in opposition to summary judgment attempted to sidestep these inconsistencies simply by masking or painting out such dates and patent numbers.

We find no abuse of discretion in the trial court’s exclusion of such evidence.

B. Appellant’s At-will Employment

The trial court determined that appellant’s causes of action for breach of an implied contract and implied covenant of good faith against SCE failed as a matter of law, on the ground that SCE produced undisputed evidence that appellant’s employment was expressly at-will pursuant to the terms of an integrated agreement. We find no error in that determination.

The parol evidence rule bars the introduction of extrinsic evidence that contradicts the express language of a written contract. (BMW of North America, Inc. v. New Motor Vehicle Bd. (1984) 162 Cal.App.3d 980, 991.) The rule “ ‘generally prohibits the introduction of any extrinsic evidence, whether oral or written, to vary, alter or add to the terms of an integrated written instrument.’ ” (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 343; see also Civ. Code, § 1625; Code Civ. Proc., § 1856.) When the parties to a contract have reduced the terms of their agreement to a writing that they intend as the final and complete embodiment of their understanding, the contract is deemed integrated and may not be contradicted or modified by evidence of any prior or contemporaneous collateral or oral agreement. (Masterson v. Sine (1968) 68 Cal.2d 222, 225; Banco Do Brasil, S.A. v. Latian, Inc. (1991) 234 Cal.App.3d 973, 1000.)

On its face, the employment agreement is a complete expression by the parties of the terms and conditions of employment. The employment agreement provides that the parties agree that appellant “is hired on a regular basis to perform such services as will be assigned from time to time” by SCE. The agreement sets forth a starting date of employment and the salary to be paid to appellant. It allows for appellant to receive benefits in addition to wages as stated in SCE’s current benefits book “or as changed during the duration of this Agreement.” The document bears the signatures of both parties; a representative of SCE signed the employment agreement as well as appellant. The employment agreement expressly provides that either appellant or SCE “may terminate [the] Agreement at any time and for any reason, on written notice.” (Italics added.) There is no room left in the employment agreement for a separate collateral agreement regarding reasons for termination. (BMW of North America, Inc. v. New Motor Vehicle Bd., supra,162 Cal.App.3d at p. 983.) Most importantly, the employment agreement clearly states, “[t]his Agreement contains the entire agreement between the parties, and both parties agree that there are no additional oral, collateral, or implied agreements of any kind.” (Italics added.)

The trial court properly determined the evidence was undisputed that appellant’s employment contract was for at-will employment. Appellant’s claimed collateral agreement for “full time employment through retirement” and purchase of appellant’s preemployment patents directly contradicts the express terms of the integrated employment agreement. Evidence of such a collateral agreement is irrelevant and inadmissible to explain the terms of the integrated employment agreement. (Banco Do Brasil, S.A. v. Latian, Inc., supra, 234 Cal.App.3d at pp. 1008-1009.)

Moreover, extrinsic evidence is admissible to explain the meaning of a written agreement only if the proffered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165, 1167; Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37.) Because the employment agreement was integrated and clearly provided for at-will employment in exchange for a certain salary and benefits, evidence of a collateral or oral agreement to employ appellant “until retirement,” to terminate employment only for good cause or to purchase patents as a term of employment is a direct contradiction of the employment agreement. The employment agreement is not reasonably susceptible to the meaning espoused by appellant. (Banco Do Brasil, S.A. v. Latian, Inc., supra, 234 Cal.App.3d at pp. 1008-1009.)

Further, any collateral or oral agreement regarding employment until retirement or the hiring of appellant in exchange for an assignment of his preemployment patents would not naturally have been made as a separate agreement. (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953-954; Masterson v. Sine, supra,68 Cal.2d at pp. 225-226; Esbensen v. Userware Internat., Inc. (1993) 11 Cal.App.4th 631, 637 & fn. 3.) The subject matter of the assignment agreement concerns the creation of intellectual property after employment by SCE. Such a document would not naturally include a promise by SCE for “full time employment through retirement.” That the employment agreement is entitled “Terms and Conditions of Employment” indicates the consideration to be paid to appellant for employment and the provisions for termination of employment would logically be included in that document alone, particularly since the parties expressly acknowledged that “[t]his Agreement contains the entire agreement between the parties . . . .”

Appellant argues the assignment agreement was not a contemporaneous agreement but an agreement entered into after the employment agreement. (Code Civ. Proc., § 1856, subd. (a).) It is true that the employment agreement is dated April 28, 1989. However, as previously noted, the employment agreement explicitly provides that “this Agreement shall be effective commencing upon June 1, 1989.” (Italics added.) The parties entered into the assignment agreement on June 1, 1989. The provisions of both documents were effective contemporaneously, and the parol evidence rule necessarily bars consideration of such extrinsic evidence at variance with the employment agreement. (Casa Herrera, Inc. v. Beydoun, supra, 32 Cal.4th at p. 344; Banco Do Brasil, S.A. v. Latian, Inc., supra, 234 Cal.App.3d at p. 1009.)

Appellant further argues that even if the court were to determine appellant was an at-will employee, it would not defeat his claim for breach of implied contract and implied covenant of good faith and fair dealing. An express agreement for at-will employment, however, precludes both a claim for breach of implied contract and breach of the implied covenant. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 340 & fn. 10, 350-352; Agosta v. Astor (2004) 120 Cal.App.4th 596, 604, 607-608; Starzynski v. Capital Public Radio, Inc. (2001) 88 Cal.App.4th 33, 38-39.)

Because we conclude the integrated employment agreement expressly and unambiguously provides for only at-will employment, we do not reach the issue whether SCE additionally had good cause to terminate appellant’s employment. (King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 438-440 [good cause shown and summary judgment properly granted upon showing that neutral personnel investigated facts, eyewitnesses provided statements, and plaintiff was given opportunity “to explain what happened” before termination]; Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256, 277 [summary judgment affirmed when decision to terminate employment for violation of company policies constituted “a reasoned conclusion supported by substantial evidence” following appropriate investigation]; see Cotran v. Rollins Hudig Hall Internat., Inc. (1998) 17 Cal.4th 93, 108 [“good cause” for termination requires only “fair and honest reasons, . . . that are not trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual”].) We note the trial court determined, and the record establishes, that SCE reached “ ‘a reasonable conclusion following an adequate investigation which included notice of the claimed misconduct and a chance for the employee to respond.’ ” That SCE arguably might have come to an erroneous conclusion does not abrogate good cause.

C. Fraud

Appellant alleged that as part of the interview process SCE orally promised to purchase his preemployment patents if he would come to work for SCE. He alleged the parties agreed the purchase price would consist of his development costs, approximately $275,000, and a percentage share of all royalties to be determined after SCE had done a cost benefit analysis. He further alleged the purchase price was to include a job “for the remainder of his career.”

SCE moved for summary judgment on appellant’s fraud claim on the same basis on which it sought summary judgment on his claims for wrongful termination. SCE also argued appellant’s fraud claim was otherwise barred by the statute of limitations.

Appellant provided a declaration in opposition to summary judgment, stating he had not sought “regular employment” with SCE but rather employment “until retirement.” He stated he believed his employment would be valid until retirement, based on the language that was added to his initial employment contract. He asserted he was told by an SCE representative that the company “was definitively going to agree to purchase my pre-employment patents . . . .”

The trial court found no triable issue of fact as to appellant’s claim for fraud, ruling that SCE had presented competent admissible evidence negating any agreement to purchase the preemployment patents and appellant’s numerous prior statements only led to an inference of the absence of agreement. The court also determined that, even if some promise had been made to appellant, appellant’s own statements indicated he knew in July 1997 that SCE had no intent to perform and his claim therefore was barred by the applicable statute of limitations.

Appellant contends the trial court erred because parol evidence is always admissible to prove fraud, including when a purportedly fraudulently induced contract contains relevant exculpatory language or integration clauses. (Hartman v. Shell Oil Co. (1977) 68 Cal.App.3d 240, 251.) A recognized exception to the parol evidence rule permits evidence of fraud to nullify an agreement, but the exception does not apply when, as here, parol evidence is offered to prove a fraudulent promise directly at variance with the terms of an integrated agreement. (Banco Do Brasil, S.A. v. Latian, Inc., supra, 234 Cal.App.3d at p. 1009; see 2 Witkin, Cal. Evidence (4th ed. 2000) Documentary Evidence, § 98, pp. 219-220.)

The admissible evidence fails to raise a triable issue of fact as to fraud. Appellant’s declaration in opposition to summary judgment only asserts he was told SCE was “definitely going to agree to purchase my pre-employment patents . . . .” (Italics added.) Such a statement at best can be construed as a mere unenforceable “agreement to agree.” (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 147, p. 186.) Further, appellant admitted in his December 2003 statement, “I previously offered my patents to SCE, but . . . they were never purchased.” (Italics added.) The record is replete with other evidence that SCE made no promise to purchase the patents. The trial court properly ruled that appellant’s declaration, insofar as it might contradict his prior signed statement, was inadmissible to raise a triable issue of fact on this issue. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 22 [“admissions against interest have a very high credibility value”]; Wagner v. Glendale Adventist Medical Center (1989) 216 Cal.App.3d 1379, 1391-1392; see Evid. Code, §§ 1220, 1221.)

Even assuming a false promise was made by SCE, a claim of fraud is barred by the statute of limitations. An action for relief on the grounds of fraud or mistake must be brought within three years, and a fraud cause of action accrues when the plaintiff discovers, or reasonably should have discovered, the fraud. (Code Civ. Proc., § 338, subd. (d).) When the facts are undisputed, as is the case here, accrual of a cause of action is a question of law appropriate for summary judgment and de novo appellate review. (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1374.)

We agree with the trial court that the undisputed evidence establishes appellant’s claim for fraud, if any, accrued at the latest in July 1997, more than three years before he filed his complaint. In July 1997, SCE wrote to appellant, offering to purchase his rights to certain of his preemployment patents for $75,000 and a certain percentage of revenue as royalty. Appellant responded with a written counteroffer in July 1997, proposing other terms and an “upfront payment” of $135,000. At that time, he stated, “I have paid all the maintenance fees in the hopes when I joined [SCE] that the company interest in my patents would translate to a prompt decision (not your fault) to acquire them. . . . [¶] . . . I hope you will find the counter offer acceptable since there is considerable outside interest in my patents.” (Italics added.) If appellant had any misperception that SCE had already agreed to purchase his patents for $275,000, its July 1997 offer was a clear repudiation of such arrangement. Appellant thus had sufficient information in July 1997 to put a reasonable person on inquiry. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111.)

We therefore find no error in the court’s granting summary judgment to SCE.

D. Denial of New Trial

Appellant contends the trial court committed reversible error by denying his motion for new trial. We disagree.

A trial court has broad discretion in ruling on a motion for new trial, and its ruling is entitled to great deference on appeal. (City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871-872.) In reviewing an order denying a new trial, we review the entire record and independently determine whether the errors claimed in the new trial motion denied appellant a fair trial. (Id. at p. 872; see also Plancarte v. Guardsmark (2004) 118 Cal.App.4th 640, 645-646.)

Appellant contends the court should have granted his motion for new trial because SCE “suppressed” three documents resulting in an incomplete record when the court ruled on summary judgment. The supposedly suppressed documents are: (1) the attachment to the assignment agreement; (2) an interlineated version of appellant’s December 2003 statement; and (3) appellant’s handwritten memo in which he purportedly disclosed to John Ballance, SCE’s director of engineering services, that he had licensed his patents to TriOw.

These documents were apparently in appellant’s possession, and there was no evidence that SCE suppressed these documents even assuming SCE had been aware of them prior to the summary judgment motions. We discuss the documents in turn.

First, as we have discussed at length above, the court properly did not consider the alleged attachment to the assignment agreement as admissible evidence since the attachment was not properly authenticated and there was no showing of its reliability.

Second, SCE was entitled to proffer and rely on appellant’s signed written statement in support of its motion for summary judgment. Even if appellant’s subsequent interlineations to his written statement were relevant, the court did not abuse its discretion in excluding appellant’s attempt to rewrite history. (D’Amico v. Board of Medical Examiners, supra, 11 Cal.3d at p. 21.) The evidence was undisputed that during SCE’s investigation into Krabbe’s allegations, the investigators met at length with appellant. The investigators prepared the statement from information received from appellant, and appellant executed the statement after reviewing it. Appellant’s statement acknowledged that he was providing the statement “voluntarily,” that the matters contained in his statement were “true and correct to the best of [his] knowledge” and that “[n]o promises or threats have been made to me and no coercion of any kind has been applied.” At deposition, appellant admitted that he signed the statement without any interlineations and only later attempted to make handwritten interlineations.

Third, the record does not establish that SCE suppressed appellant’s November 26, 2002 handwritten memo addressed to Ballance. The note was supposedly posted on a copy of appellant’s agreement to license his preemployment patents to TriOw. However, Ballance testified at deposition, and appellant confirmed in his signed statement, that appellant told Ballance about the agreement only after Krabbe had already raised the conflict of interest allegations. Ballance testified that appellant admitted in that conversation that he had intended to give Ballance a copy of the agreement earlier but had misfiled it. Although appellant asserted in opposition to summary judgment that he provided Ballance with his handwritten note and a copy of the license agreement on November 26, 2002, appellant never established that the memo was ever in SCE’s possession or in its files. In any case, the handwritten memo fails to raise any triable issue of fact. Whether appellant’s management was promptly informed of the licensing arrangement related to, but was not determinative of, whether his employment was terminated for good cause. Since we determine appellant’s employment was at-will, SCE was entitled to terminate him regardless of cause. Any exclusion or suppression of appellant’s memo therefore was not prejudicial.

We conclude the court did not abuse its discretion in denying the motion for new trial.

2. Summary Judgment for Krabbe

In granting summary judgment to Krabbe, the trial court found there was no triable issue of fact regarding appellant’s claimed causes of action for libel, defamation, interference with prospective economic advantage, tortious inducement of breach of contract, and intentional infliction of emotional distress. The court determined it was undisputed that appellant’s damages stemmed from the termination of his employment with SCE rather than from Krabbe’s allegedly defamatory statements. The court also ruled that truth was an “absolute” defense to appellant’s claims and the allegedly defamatory statements were corroborated by SCE’s investigation.

Appellant contends the trial court erred in granting a summary judgment to Krabbe because: (a) he is not required to prove damage from the alleged defamatory statements; (b) truth is not a defense to the claimed defamation; and (c) the trial court applied an erroneous standard for causation. Appellant also asserts the trial court erred in not separately analyzing each of his causes of action. In response, Krabbe relies solely on a concession in appellant’s separate statement that each cause of action is based upon the alleged defamatory statements and such statements caused his termination from SCE. Krabbe argues the trial court’s finding that appellant’s damages were not proximately caused by Krabbe’s statements disposes of all five causes of action.

Krabbe’s responding brief contains not a single citation to legal authority. Although we affirm the grant of summary judgment, we do so despite Krabbe’s failure to assist this court by appropriate citation of relevant legal authority. (See Cal. Rules of Court, rule 8.204(a)(1)(B).)

We conclude upon independent review that the trial court properly granted Krabbe a summary judgment. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 860.)

Pursuant to Code of Civil Procedure section 437c, subdivision (m)(2), we solicited the parties’ views on the question whether summary judgment for Krabbe may be affirmed on a ground not relied on by the trial court, namely, that the alleged defamatory statement is not actionable. We invited the parties to submit additional briefing on the issue whether the alleged defamatory statement is a statement of fact or whether it is merely a statement of opinion as a matter of law. Krabbe submitted a supplemental letter brief in response, and the court has taken it into consideration.

A. Libel and Slander

In defining libel and slander, Civil Code sections 45 and 46 both refer to a “ ‘false . . . publication . . . .’ ” The statutory definition can only be meaningfully applied when statements are capable of being proved as false or true. (Savage v. Pacific Gas & Electric Co. (1993) 21 Cal.App.4th 434, 444-445, citing Hofmann Co. v. E. I. Du Pont de Nemours & Co. (1988) 202 Cal.App.3d 390, 397, fn. 4.) Because an opinion is the result of a mental process, it is not capable of proof in terms of truth or falsity. (Hofmann Co. v. E. I. Du Pont de Nemours & Co., at p. 397, fn. 4.) Statements of opinions that do not convey a false factual imputation are not actionable as a matter of law. (Ibid., fn. 4; see also Kahn v. Bower (1991) 232 Cal.App.3d 1599, 1607.) In most cases, whether an allegedly defamatory statement constitutes fact or opinion is a question of law. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1011.) We consider the totality of the circumstances in determining whether a statement is sufficiently communicative of provable falsity or actual fact for liability. (Kahn v. Bower, supra, at p. 1608.)

In Savage, plaintiff journalist alleged that a utility company had defamed her by informing her employer she “might have a conflict of interest” in objectively reporting on energy related news. (Savage v. Pacific Gas & Electric Co., supra,21 Cal.App.4th at pp. 442-444.) As a result of defendant’s statements, plaintiff was fired on the ground she had a conflict of interest. (Id. at p. 444.) The appellate court held as a matter of law that defendant’s statement did not fall within the category of fact, because “[t]he determination of a conflict of interest involves instead an application of an ethical standard to facts, reflecting the exercise of judgment.” (Id. at p. 445.) The court observed, “the expressed belief in the existence of a conflict of interest does not imply an objective fact that can be proved to be true or false.” (Ibid.) In the present case, Krabbe informed SCE that appellant had “engaged in unethical actions for purposes of personal enrichment and to the detriment of [SCE].” Similar to Savage, this statement was a mere expression of opinion that could not be proved true or false as an objective fact.

Appellant relies on Slaughter v. Friedman, a case in which an insurance company administrator wrote letters to policyholders denying their claims for dental coverage, stating that plaintiff, their dentist, had performed work that was “unnecessary” and engaged in “overcharging.” (Slaughter v. Friedman (1982) 32 Cal.3d 149, 153.) The trial court sustained defendant’s demurrer without leave to amend and the Supreme Court reversed the resulting judgment. Slaughter reasoned that “[a]lthough accusations of ‘excessive’ fees or ‘unnecessary’ work when made by laymen might indeed constitute mere opinion, similar accusations by professional dental plan administrators carry a ring of authenticity and reasonably might be understood as being based on fact.” (Id. at p. 154.) The Supreme Court determined that whether the remarks were libelous was an issue for the jury. Slaughter is distinguishable from the instant case, because Krabbe had no such aura of authority. Krabbe’s statements merely prompted an investigation by a sophisticated corporate entity. Rather than any declaration of fact, Krabbe’s allegations that appellant had engaged in “unethical” actions were expressions of unambiguous opinion requiring application of an ethical standard to facts and an exercise of judgment.

We further reject appellant’s contentions that summary judgment for Krabbe was inappropriate with respect to his remaining claims of intentional interference with prospective economic advantage, interference with contract, and intentional infliction of emotional distress.

B. Intentional Interference with Prospective Economic Advantage

To prevail on a claim for interference with prospective economic advantage, a plaintiff must show the defendant engaged in an “independently wrongful act.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158; Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393 [plaintiff must plead and prove defendant’s interference was wrongful “ ‘by some measure beyond the fact of the interference itself’ ”].) An independently wrongful act is one that is unlawful, i.e., proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard. (Korea Supply Co. v. Lockheed Martin Corp., supra,at p. 1158.) Because Krabbe’s statements were not actionable defamation, they fail to give rise to a claim for interference with prospective economic advantage. (ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at p. 1014 [“Like the tort of trade libel, interference with prospective economic advantage requires false statements of fact”].)

C. Intentional Interference with Contract

As with the tort of intentional interference with prospective economic advantage, the plaintiff must plead and prove an independently wrongful act by the defendant for an intentional interference with at-will employment. (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1152-1153.) The admissible evidence here established there was no triable issue of fact that Krabbe’s statements were not tortious or unlawful.

D. Intentional Infliction of Emotional Distress

Because the undisputed evidence showed Krabbe’s statements were mere expressions of opinion, there was no outrageous conduct establishing an intentional infliction of emotional distress. (Cochran v. Cochran (1998) 65 Cal.App.4th 488, 494.)

3. Motion for Reconsideration

We further disagree with appellant’s assertion that the trial court erred in denying his motion for reconsideration of the summary judgments. Under Code of Civil Procedure section 1008, a party moving for reconsideration must show new or different facts or law and a satisfactory explanation for the failure to present such facts or law earlier. (Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1198; Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 687-690; see Le Francois v. Goel (2005) 35 Cal.4th 1094, 1099-1100.) Appellant failed to show new facts, circumstances, or law warranting reconsideration, and the court properly denied the motion for reconsideration.

4. Motion for Relief from Summary Judgments

Appellant states in opposing summary judgment his counsel mistakenly placed language authenticating a document into counsel’s own declaration instead of the declaration of appellant and failed to list documents his expert reviewed in formulating opinions. Appellant contends the trial court reversibly erred in denying mandatory relief from the summary judgments under Code of Civil Procedure section 473, subdivision (b) upon his attorney’s affidavit of fault due to the attorney’s mistake, inadvertence or neglect in drafting the papers opposing summary judgment. We disagree.

Code of Civil Procedure section 473, subdivision (b) provides, in pertinent part: “Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (Italics added.)

When the applicability of the mandatory relief provision of Code of Civil Procedure section 473, subdivision (b) does not turn on disputed facts, the issue presents a pure question of law subject to de novo review. (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 615.)

In Prieto v. Loyola Marymount University (2005) 132 Cal.App.4th 290 (Prieto), we held that because a summary judgment is not a default, default judgment or a dismissal, it may not be the subject of mandatory relief under Code of Civil Procedure section 473, subdivision (b). (Prieto, at p. 295; see also English v. IKON Business Solutions, Inc. (2001) 94 Cal.App.4th 130, 148-149 [summary judgment does not constitute removal of plaintiff’s application for judicial relief, but rather adjudication of that application based on undisputed facts before court]; Garcia v. Hejmadi, supra,58 Cal.App.4th at p. 684 [mandatory relief provision does not apply to summary judgment lost on its merits by substantively inadequate opposition rather than complete failure to oppose].)

Our holding in Prieto is dispositive, and the trial court did not err in denying appellant’s motion.

DISPOSITION

The judgment is affirmed. Respondents are to recover costs on appeal.

We concur:

COOPER, P. J., RUBIN, J.


Summaries of

Fernandes v. Krabbe

California Court of Appeals, Second District, Eighth Division
Feb 13, 2008
No. B190488 (Cal. Ct. App. Feb. 13, 2008)
Case details for

Fernandes v. Krabbe

Case Details

Full title:ROOSEVELT A. FERNANDES, Plaintiff and Appellant, v. KURT P. KRABBE et al.…

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

Date published: Feb 13, 2008

Citations

No. B190488 (Cal. Ct. App. Feb. 13, 2008)