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Smallwood v. Fremont Surgery Center Medical Clinic, Inc.

California Court of Appeals, First District, Second Division
May 25, 2010
No. A124901 (Cal. Ct. App. May. 25, 2010)

Opinion


ANNA MARIE SMALLWOOD, Plaintiff and Appellant, v. FREMONT SURGERY CENTER MEDICAL CLINIC, INC., Defendant and Respondent. A124901 California Court of Appeal, First District, Second Division May 25, 2010

NOT TO BE PUBLISHED

Alameda County Super. Ct. No. HG06275581.

Lambden, J.

Anna Marie Smallwood sued Fremont Surgery Center Medical Clinic, Inc., doing business as Washington Outpatient Surgery Center (the surgery center) after the surgery center terminated her employment. The surgery center filed a summary judgment/summary adjudication motion, which the trial court granted in part and denied in part. Subsequently, the surgery center filed another summary judgment motion against Smallwood’s remaining claims for promissory estoppel, promissory fraud, and intentional concealment. The court granted this motion and dismissed Smallwood’s complaint.

The record indicates that the name is actually Fremont Surgery Center Associates and Smallwood erroneously sued it as the Fremont Surgery Center Medical Clinic, Inc.

On appeal, Smallwood contends that the lower court should not have considered the second summary judgment motion because this motion raised the same issues decided in the first motion and therefore the Code of Civil Procedure section 437c, subdivision (f)(2) barred the second motion. Additionally, she maintains that the superior court erred when it granted summary judgment based on her being an at-will employee and a finding that the surgery center did not make any definite promise upon which she detrimentally relied. We are not persuaded by her arguments and affirm the lower court’s judgment.

All further unspecified code sections refer to the Code of Civil Procedure.

BACKGROUND

The surgery center is a medical clinic specializing in outpatient surgical care. Smallwood began working at the surgery center as a staff nurse on August 2, 1988. In 1993, the surgery center promoted her to manager of the recovery room, a position she held until December 2005.

The Personnel Policy Manual (the manual) is provided to all surgery center employees. Policy 7015 contained in the manual states: “The [surgery center] offers no employment contracts nor does it guarantee any minimum length of employment. The [surgery center] reserves the right to terminate any employee at anytime ‘at will’ with or without cause. A supervisor or manager of the [surgery center] has no authority whatsoever to make any contrary representations to any employee. [¶] It is the policy of the [surgery center] to work with each and every employee to ensure a satisfactory work environment, long-term job satisfaction, as well as ongoing training and education. At the same time, we do maintain the policy of ‘at-will’ employment and due to changing economic or other conditions, maintain the work force on an at-will basis.”

At the time of Smallwood’s employment and since 2000, Gary Charland had the position of administrator of the surgery center. His duties included overseeing the surgery center’s operations and administration, and hiring and firing the surgery center’s employees.

In 2005, the surgery center’s director of nursing was Suzanne McAuliffe. She was Smallwood’s supervisor. McAuliffe was struggling to perform all of her tasks satisfactorily.

In September 2005, Charland asked Smallwood if she would be interested in accepting the soon to be created position of director of continuous quality improvement and utilization management (CQI/UM). The surgery center decided to create the CQI/UM position because McAuliffe was having problems with some of her tasks; the director of CQI/UM was to have some of the responsibilities traditionally performed by the director of nursing. Charland declared that he explained to Smallwood that the surgery center was creating the director of CQI/UM position because of McAuliffe’s difficulty in performing all of her job functions, but Smallwood denied being told that. Smallwood agreed that Charland told her that her knowledge, background, and experience made her an ideal choice for the position. According to Smallwood, Charland did not have “a clear idea of what the duties would be other than” that the position “would be lateral” to McAuliffe’s position. Smallwood told Charland that she probably would be interested.

After reconsidering, Smallwood told Charland she was no longer interested in the director of CQI/UM position. Smallwood believed that accepting the position would cause conflict with McAuliffe, since the position would include responsibilities that had been performed by McAuliffe.

Dr. Dale Elleson, the president of the surgery center’s board of directors, called Smallwood at her home and asked her to reconsider her decision not to accept the director of CQI/UM position. Smallwood testified that he told her that she was the person who could do this job. He told her that he could understand her concerns regarding McAuliffe, but reassured her that Charland and Dr. Jeffrey Scott Stuart would handle any difficulties she might have with McAuliffe. Additionally, Elleson promised that she could go to him if there were problems. At the end of the conversation, Smallwood agreed to take the job.

Smallwood reported to Charland that she had told Elleson she would accept the job of director of CQI/UM. Smallwood disclosed what Elleson had promised her and Charland agreed that Stuart and he would take care of any problems arising between Smallwood and McAuliffe. Charland responded that he very much wanted Smallwood to succeed in this job.

Smallwood told Charland that she would stay a few extra years rather than retire to get the director of CQI/UM position set-up. In her declaration, Smallwood stated: “In my discussions with [Charland] about the Director CQI/UM position, he said a) there would be no probationary period for the position; b) that the position was a promotion from my Manager of the Recovery position; c) that an increase in my pay would be looked at; and that we would find work space for me on the floor [of] the Surgery Center’s facility.”

Smallwood began performing the duties of the director of CQI/UM in December 2005. McAuliffe was supposed to provide training, but she never had time to do this. Smallwood testified that McAuliffe and she began having a battle “right off the start[.]” Smallwood complained to Charland. Charland told Smallwood that he talked to McAuliffe. He testified that he advised McAuliffe that if she prevented Smallwood from succeeding in her job, he would fire McAuliffe.

It became apparent to Charland that the experimental situation of having Smallwood perform the job of director of CQI/UM was not working. Smallwood’s responsibilities included reducing excessive overtime and monitoring the continuing education of the nursing staff. Charland asserted that staff in payroll complained that Smallwood was not doing her job adequately. Three nurses objected to having Smallwood decide whether they could take the educational leave they had requested and claimed that her decisions were arbitrary or capricious. Charland admitted, however, that he did not find these claims to be true.

After a few months, it was determined that McAuliffe’s employment would be terminated. At this time, according to Charland, it became apparent there also would be no position for Smallwood. Charland agreed that he never told Smallwood that her position as director of CQI/UM was dependent upon McAuliffe’s continuing her employment with the surgery center. He explained that he never anticipated that McAuliffe would be leaving.

Smallwood declared that she was never told that the director of CQI/UM was an experimental position. She maintained that she would never have accepted the position had she known that.

On March 2, 2006, the surgery center terminated Smallwood’s employment.

Smallwood filed her lawsuit against the surgery center on June 21, 2006. On March 22, 2007, the surgery center filed a motion for summary judgment or in the alternative summary adjudication. Smallwood filed a motion for leave to file her first amended complaint on May 4, 2007, and the court granted the motion on May 29, 2007.

On June 7, 2007, Smallwood filed her first amended complaint, which included eight causes of action against the surgery center for employment discrimination, wrongful termination of employment in violation of public policy, negligence, breach of implied contract of continued employment, breach of implied covenant of good faith and fair dealing, promissory estoppel, promissory fraud, and intentional concealment. The surgery center demurred to Smallwood’s claims for promissory estoppel, promissory fraud, and intentional concealment. The court sustained the surgery center’s demurrer with leave to amend.

Smallwood filed her second amended complaint on September 5, 2007. This pleading contained the same causes of action set forth in her prior pleading.

The surgery center on January 16, 2008, again filed a motion for summary judgment or in the alternative summary adjudication against Smallwood’s second amended complaint. Judge Barbara J. Miller issued an order on April 8, 2008, which partially granted the surgery center’s motion. The court granted the motion as to Smallwood’s first five causes of action for employment discrimination, wrongful discharge in violation of public policy, negligence, breach of implied contract of continued employment, and breach of the implied covenant of good faith and fair dealing.

The court denied the surgery center’s motion without prejudice as to Smallwood’s claims for promissory estoppel, promissory fraud, and intentional concealment. The court explained: “In Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174, 1179, 1184, relied upon by [the surgery center], the California Supreme Court held that a fraud claim would not be recognized where it was merely a restatement of the plaintiff’s wrongful termination cause of action. The Hunter court expressly noted, however, that its ruling did not extend to situations where the alleged misrepresentation was not aimed at effecting the termination of the employment relationship. [(Id. at p. 1186.)] If the misrepresentation is ‘instead designed to induce the employee to alter detrimentally his or her position in some other respect, [it] might form a basis for a valid fraud claim even in the context of a wrongful termination.’ [(Ibid.)] The evidence before the court shows that plaintiff Smallwood was reluctant to take the new Director of CQI/UM position until she was given assurances by Dr. Elleson that management would support her in her new role and in connection with her dealings with Director of Nursing, Suzanne McAuliffe. A reasonable trier of fact could find that plaintiff relied to her detriment on these statements by the President of defendant’s Board of Directors since there is no suggestion that her position as Manager of the Recovery Room was in jeopardy despite the limitations in her job performance noted by defendant in its papers. The Motion is denied as to the Sixth, Seventh and Eighth Causes of Action without prejudice to permit defendant to file another Motion for Summary Judgment, or alternatively, Summary Adjudication.”

The surgery center filed another motion for summary judgment or in the alternative summary adjudication on October 22, 2008. Judge John M. True, III, granted the motion for summary judgment on January 20, 2009. As to the sixth and seventh causes of action for promissory estoppel and promissory fraud, respectively, the court found that the record failed to disclose the existence of triable issues of material fact that Charland and Elleson made clear and unambiguous promises to Smallwood that she relied upon to her detriment, and the court cited Helmer v. Bingham Toyota Isuzu (2005) 129 Cal.App.4th 1121, 1129, footnote 3. The court specified that the surgery center did not represent to Smallwood that she would no longer be considered an “at will” employee if she accepted the director of CQI/UM position. The court elaborated that the record showed that the surgery center promised to support her if she had problems with McAuliffe, but the record established that the surgery center did provide the promised support. Furthermore, the court ruled that Smallwood failed to demonstrate that her reliance on this representation proximately caused her to sustain any injury.

The court granted the motion as to the eighth cause of action for intentional concealment of material fact related to failing to disclose that the new position was dependent upon the improved performance of McAuliffe and that McAuliffe had only three months to show improved performance. The court found “nothing beyond speculation” that anyone within the management of the surgery center knew that the position of director of CQI/UM would be eliminated if it decided to discharge McAuliffe for poor performance.

The court rejected Smallwood’s contention that it should deny or strike the surgery center’s motion for summary judgment based upon sections 437c, subdivision (f)(2) and 1008. Judge True cited Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108-1109 and noted that Judge Miller in her prior ruling “explicitly invited” the surgery center to file the motion. Judge True elaborated: “The court made the invitation due to the fact that [the surgery center] relied solely upon the case of Hunter v. Up-Right, Inc.[, supra, ] 6 Cal.4th [at pages] 1179 [and] 1184, in the earlier Motion for Summary Judgment. [The surgery center] here has not asked the court to reconsider its earlier ruling that the Hunter case is distinguishable.”

The court also rejected Smallwood’s objections to the surgery center’s summary judgment motion based upon the surgery center’s failure to comply strictly with California Rules of Court, rule 3.1350. The court acknowledged that the surgery center’s separate statement of undisputed material facts and its appendix of evidence did not comply with the rules, but ruled the remedy suggested by Smallwood was “simply too drastic.”

Judgment was entered in favor of the surgery center on January 30, 2009. Smallwood moved for a new trial, which the court denied on March 19, 2009. Smallwood filed a timely notice of appeal, and the parties filed their briefs in this court.

We note that both parties made this court’s job much more difficult by citing to the separate statement of facts rather than to the actual evidence. This court had to spend a significant amount of time searching through the seven volumes of transcripts for the actual evidence mentioned in the separate statement of facts. The parties are reminded that this court looks at the evidence in the record and not to counsel’s argument or summary of the evidence.

DISCUSSION

I. The Second Summary Judgment Motion

Smallwood contends that the lower court abused its discretion when it refused to reject, pursuant to section 437c, subdivision (f)(2), the surgery center’s second motion for summary judgment. Under section 437c, subdivision (f)(2) or section 1008, which concerns applications for reconsideration, the second motion can only be considered if the repeated motion is “based on new... facts... or law.” (Le Francois v. Goel, supra, 35 Cal.4th at p. 1098.)

Smallwood also cites section 1008, which more generally states procedures for applications to reconsider any previous court order. Section 1008, subdivision (c) provides: “If a court at any time determinesthat there has been a change of law that warrants it to reconsider a prior order it entered, it may do so on its own motion and enter a different order.” Subdivision (e) in section 1008 reads: “This section specifies the court’s jurisdiction with regard to applications for reconsideration of its orders and renewals of previous motions, and applies to all applications to reconsider any order of a judge or court, or for the renewal of a previous motion, whether the order deciding the previous matter or motion is interim or final. No application to reconsider any order or for the renewal of a previous motion may be considered by any judge or court unless made according to this section.”

Section 437c, subdivision (f)(2) provides that “a party may not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.” We review the trial court’s decision to allow a party to file a renewed or subsequent motion for summary judgment for an abuse of discretion. (Pender v. Radin (1994) 23 Cal.App.4th 1807, 1812; Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 72 (Nieto).)

Smallwood argues that the surgery center’s argument in both of its summary judgment motions was that Smallwood lacked evidence to establish her claims. The notices to both of the surgery center’s motions stated that the motion was based on the ground that Smallwood lacked evidence to establish any of the causes of action plead in her complaint. She also emphasizes that this was the same issue set forth in the surgery center’s separate statement of undisputed facts attached to both of its motions. Smallwood maintains that the surgery center raised no new facts in the second motion that were not or could not be raised in the prior motion. Thus, Smallwood contends that the lower court should have rejected the second motion for summary judgment because it raised the same issues decided in the first motion.

Our review of the record indicates that the actual issues argued and decided in the two motions were significantly different. In the first motion filed on January 16, 2008, the surgery center argued that Smallwood’s claims failed as a matter of law since her status as an at-will employee prevented her from demonstrating detrimental reliance. The surgery center principally relied on Hunter v. Up-Right, supra, 6 Cal.4th 1174 (Hunter) when arguing that Smallwood could not establish detrimental reliance because “it could have terminated her directly, and did not need to employ a falsehood to accomplish this goal.”

In denying the surgery center’s motion for summary judgment without prejudice, the court on April 8, 2008, stated that Hunter barred fraud claims when the claims were essentially wrongful termination claims. However, the Hunter court permitted fraud claims when the misrepresentation was not related to the termination of the employment relationship and there was a triable issue of fact that the surgery center induced Smallwood to take the director of CQI/UM position based on assurances by Elleson that management would support Smallwood in her new role and in connection with her dealings with McAuliffe. The court denied the motion without prejudice “to permit” the surgery center “to file another” motion for summary judgment.

The surgery center filed a second motion for summary judgment and argued that Smallwood could not have relied to her detriment on any promises when accepting the job as director of CQI/UM because the promises upon which Smallwood claimed to rely were too vague or ambiguous. The surgery center asserted that there was no evidence that it made any specific promises regarding length of employment, pay, or “any other matter that might be considered definite and concrete.” Further, it claimed that the promise to support Smallwood could not be the basis of a claim because the record contains no evidence that it did not provide her with support or did not intend to provide her with support.

With regard to Smallwood’s intentional concealment claim, the surgery center argued that the undisputed evidence showed that Smallwood knew that the position of director of CQI/UM was new and novel in nature. The surgery center claimed that the record contained no evidence that it knew at the time it offered Smallwood the position that the director position was tied to McAuliffe’s position.

We conclude that the issues argued and decided in the second summary motion were sufficiently different than those raised and determined in the first summary motion. (See Patterson v. Sacramento City Unified School Dist. (2007) 155 Cal.App.4th 821, 827 [section 437c, subdivision (f)(2) did not bar the second summary judgment motion when, even though both summary judgment motions involved duty, the first motion focused on whether there was a statutory basis for imposing a duty and the second motion focused on whether the common law defense of assumption of risk applied to negate any claim of duty]; see also Abassi v. Welke (2004) 118 Cal.App.4th 1353, 1360 [proper exercise of discretion to entertain and rule upon second summary judgment motion that was not based on new evidence, where the parties had an opportunity to brief the issue, a hearing was held, and summary judgment was the most efficient manner in which to proceed].) Although the present case differs from the situation in Patterson where the defendant raised a newly decided case and a different legal theory, the issues raised in the two motions by the surgery center were distinctively different.

Contrary to Smallwood’s argument, we do not simply focus on the issues raised in the notices of the motions or the issues set forth in the separate statement of facts, especially in the present case where the separate statement of facts was not done correctly. We focus on the issues and facts argued by the surgery center, the evidence presented, and the rulings of the trial court.

The present case is more akin to Nieto, supra, 181 Cal.App.4th 60, a case not cited by either party. In Nieto, the insurer filed a motion for summary judgment based on no duty to investigate, which was denied without prejudice, and the insurer later filed a summary judgment on the ground that the undisputed evidence showed it lawfully rescinded the policy because the insured concealed material information when she applied for health insurance. (Id. at p. 69.) The appellate court held that the second summary judgment motion was not barred by section 437c, subdivision (f)(2), because the second motion addressed an issue not raised by the prior motion. (Nieto, supra, at p. 72.)

The focus of the surgery center’s first summary judgment motion was that Smallwood could not establish detrimental reliance as a matter of law under the holding of Hunter, supra, 6 Cal.4th 1174, simply because she was an at-will employee. In the second motion, the surgery center raised a different issue and did not simply rely on Hunter or try to argue that the facts of the present case were similar to those in Hunter. Rather, in that motion the surgery center argued that the record did not establish that Smallwood relied on a definite promise to support her promissory estoppel and promissory fraud claims. It also contended that the record contained no evidence to establish the surgery center’s intent. Thus, similarly to the situation in Nieto, here, the issues raised and decided in the two motions were significantly different.

Since the issues raised in the two summary judgment motions were not identical, the present case is distinguishable from Bagley v. TRW, Inc. (1999) 73 Cal.App.4th 1092 and Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, the two cases cited by Smallwood. The reviewing court in Bagley held that section 437c, subdivision (f)(2) barred the trial court from considering a second summary judgment motion in an employment termination case that was factually and analytically identical to a prior motion. (Bagley, supra, at pp. 1096-1097.) The court noted that it was immaterial that the court denied the first motion without prejudice because the second motion was identical to the first and “none of the evidence presented in support of the second motion was ‘new.’ ” (Id. at p. 1097.) Similarly, in Schachter, the defendants filed a second summary judgment nearly four years after their first motion had been denied and the evidence submitted in support of the second motion while “ ‘cosmetically repackaged, ’ ” was essentially “ ‘identical’ ” to the first motion and no new issues were raised. (Schachter, supra, at p. 738.) The appellate court held that the defendant employer was prohibited from bringing the second motion since it raised no new facts, new circumstances, or change in law. (Ibid.)

Here, unlike the situations in Bagley v. TRW, Inc., supra, 73 Cal.App.4th 1092 and Schachter v. Citigroup, Inc., supra, 126 Cal.App.4th 726, the motions by the surgery center were not essentially identical. Accordingly, we conclude that the lower court did not abuse its discretion in considering the merits of the second summary judgment motion.

The surgery center also argues that the lower court’s denial of its first motion “as to the Sixth, Seventh and Eighth Causes of Action without prejudice to permit defendant to file another Motion for Summary Judgment, or alternatively, Summary Adjudication” indicated that the court was suggesting or encouraging it to file a second motion. Smallwood responds that this is an “overstatement” of what the court did and that “the trial court had no authority to either advise or allow the Surgery Center to violate section 437c[, subdivision (f)(2)].”

II. The Granting of Summary Judgment

A. Standard of Review

We review a trial court’s grant of summary judgment de novo. (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 388-389.) “In performing our de novo review, we must view the evidence in a light favorable to [the] plaintiff as the losing party [citation], liberally construing [the plaintiff’s] evidentiary submission while strictly scrutinizing [the] defendant[’s] own showing, and resolving any evidentiary doubts or ambiguities in [the] plaintiff’s favor.” (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768-769.)

The trial court shall grant the defendant’s motion for summary judgment “if all the papers submitted show that there is no triable issue as to any material fact and that [defendant] is entitled to a judgment as a matter of law.” (§ 437c, subd. (c).) A defendant moving for summary judgment meets its burden of showing that there is no merit to a cause of action by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. (§ 437c, subd. (p)(2).) Once the defendant has made the required showing, the burden shifts back to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or defense. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849, 853.) California law requires that “a defendant moving for summary judgment... present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Id. at p. 854, fn. omitted.)

B. Smallwood’s Claims of Promissory Estoppel and Promissory Fraud

Smallwood contends that the lower court erred in granting summary judgment because it improperly found her status of being an at-will employee was dispositive. She maintains that her status of being an at-will employee did not bar her claim that she was induced to leave her previous position, which supported her causes of action for promissory estoppel and promissory fraud. She asserts that the critical factor was whether the surgery center lied to her and concealed facts to induce her to accept the new position.

In granting the surgery center’s summary judgment motion against Smallwood on her claims for promissory estoppel and promissory fraud, the trial court did not simply rule that her claims were barred because she was an at-will employee. Rather, the court stressed that Smallwood submitted no evidence that her at-will status would change if she accepted the director of CQI/UM position and therefore she could not claim that her termination violated any specific promise. Further, since Smallwood was an at-will employee as the manager, her employment could have been terminated at any time in that position; consequently, she suffered no injury or change in her position as a result of having her position terminated as the director of CQI/UM. Finally, the trial court found that the evidence showed that the only concrete promise made by the surgery center to Smallwood was that the surgery center would support her if she had problems with McAuliffe and the undisputed evidence established that the surgery center fulfilled this promise. For the reasons discussed below, we agree with the lower court’s ruling.

“ ‘ “Promissory fraud” is a subspecies of fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud. [Citations.]’ ” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974.) “ ‘An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.’ [Citation.]” (Ibid.) “ ‘The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ [Citations.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar).)

“[T]he doctrine of promissory estoppel is essentially equitable in nature.” (C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 8.) The doctrine “employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.” (Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665, 672.) “ ‘Under this doctrine a [promissor] is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement.’ ” (Id. at p. 672, fn. 1.) The required elements for promissory estoppel are largely the same as the elements for promissory fraud. Promissory estoppel requires “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) his reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 890; see also Helmer v. Bingham Toyota Isuzu, supra, 129 Cal.App.4th at p. 1129, fn. 3.)

In arguing that the lower court erred, Smallwood relies on Lazar, supra, 12 Cal.4th 631, Hunter, supra, 6 Cal.4th 1174, and Agosta v. Astor (2004) 120 Cal.App.4th 596 (Agosta). However, these cases support the lower court’s ruling that the record failed to disclose the existence of triable issues of material fact that the surgery center made any clear and unambiguous promises to Smallwood that she relied upon to her detriment.

In Hunter, an employer made a misrepresentation in order to induce an employee to resign. (Hunter, supra, 6 Cal.4th at p. 1179.) The Supreme Court held that the employee could not recover tort damages based on this allegedly fraudulent act because the employer could have directly terminated the plaintiff’s employment and had merely introduced the element of misrepresentation in the course of effecting that result. (Id. at pp. 1178, 1184.) Thus, the plaintiff did not rely to his detriment on the misrepresentations in suffering constructive dismissal. (Id. at p. 1184.)

In Lazar, supra, 12 Cal.4th 631, the Supreme Court clarified its holding in Hunter, supra, 6 Cal.App.4th 1174, and explained that Hunter “did not mean thereby to suggest that simply effecting a termination in conjunction with fraudulent conduct will insulate an employer from an otherwise properly pled fraud claim. We meant, rather, to preclude fraud recovery only where ‘the result of [the employer]’s misrepresentation is indistinguishable from an ordinary constructive wrongful termination.’ ” (Lazar, supra, at p. 643.)

The employee in Lazar, supra, 12 Cal.4th 631brought an action against his former employer for various causes of action, including fraud and deceit and promissory estoppel, after being terminated from his management position. (Id. at p. 637.) The plaintiff employee had been working in New York from 1972 to 1990 with a family-owned restaurant equipment company. (Id. at p. 635.) The defendant employer asked him to leave his job to come work for the defendant in Los Angeles and, when the employee expressed concern about relocating, the defendant employer falsely told him his job in Los Angeles would be secure and would involve significant pay increases. (Id. at pp. 635-636.) The company’s representations to the plaintiff regarding the terms on which he would be retained, the defendant’s financial health, and the potential compensation to the plaintiff were false and, when making them, the defendant’s agents knew they were false. (Id. at p. 636.) Two years after relocating to Los Angeles, the defendant terminated the employment of the plaintiff and told him that his job was being eliminated owing to management reorganization. (Id. at pp. 636-637.)

In concluding that the plaintiff employee could state claims against his employer, the Supreme Court explained that there can be a valid fraud claim even in the context of wrongful termination if the “ ‘misrepresentation [was] not aimed at effecting termination of employment, but instead designed to induce the employee to alter detrimentally his or her position in some other respect....” (Lazar, supra, 12 Cal.4th at p. 640.) The court stressed the two factors that must be present are detrimental reliance and the employer’s misrepresentation must be different from an ordinary constructive wrongful termination claim. (Id. at p. 643.) The Supreme Court held that the employee did have a claim for fraud because the defendant’s misrepresentations “were made before the employment relationship was formed, when [defendant] had no coercive power over [the plaintiff] and [the plaintiff] was free to decline the offered position.” (Id. at p. 642.) Further, the misrepresentations resulted in damages to the plaintiff that included expenses incurred in relocation and the loss of security and income associated with his former employment and these damages were distinguishable from those incurred as a result of the termination itself. (Id. at p. 643.)

Lazar establishes that employees can maintain a cause of action for fraud against their employer only if they allege all of the elements of such a claim, including detrimental reliance, and if they allege damages distinct from the termination itself. Here, unlike the situation in Lazar, Smallwood cannot allege any damages. The surgery center could have terminated Smallwood’s employment at any time when she was a manager and that did not change when she became the director of the CQI/UM. Further, unlike the situation in Lazar, Smallwood points to no promises made to her upon which she detrimentally relied. The record contains no evidence that she was ever promised that the director position would be permanent or that she could have that position for any length of time.

Smallwood contends that the surgery center told her that the director of CQI/UM and the director of nursing were lateral positions and that there was no probationary period for the director of CQI/UM position. She declared that the surgery center also told her that it would consider increasing her pay. Additionally, she stresses that she told Charland that she intended to work for a few more years rather than retire, and he did not respond that the job was experimental and might not last a few years. She maintains that these statements raised a triable issue of fact that the surgery center promised her that she could have the director of CQI/UM position for more than three months and that her job was not connected to McAuliffe’s performance on her job.

To satisfy the requirements of promissory fraud or promissory estoppel, the promise inducing the detrimental reliance must be clear and unequivocal. (See, e.g., Laks v. Coast Fed. Sav. & Loan Assn., supra, 60 Cal.App.3d at p. 890.) The abovementioned statements simply indicated the following: Smallwood’s position would have the same status or rank as McAuliffe’s job, the surgery center might at some point consider increasing Smallwood’s pay, and Smallwood would not have a probationary period while doing the job. There was no promise that Smallwood could have the job for a specific period of time or that the position would not be terminated if the surgery center decided to eliminate this position. There was no definite promise related to pay. Smallwood’s comment that she would remain a few more years rather than retire did not require a response from the surgery center; the lack of any response does not constitute a clear promise that Smallwood could have the job until she decided to retire. Indeed, Smallwood specifically testified that aside from being assured that she would be supported in her new position, no specific promises were made to her about the director of CQI/UM position.

Counsel for the surgery center asked Smallwood whether Charland made “any promises to [her] regarding anything other than the fact that they would support you, ” and Smallwood responded, “No.”

To the extent that Smallwood is arguing that she never would have accepted the manager position had she not been falsely induced to accept the director of CQI/UM position, this assertion, too, must fail. Smallwood maintains that she would not have accepted the director of CQI/UM position absent the surgery center’s promises about how it would handle McAuliffe, and these inducements were made stronger because Smallwood and her husband had a social relationship with Elleson and his wife. The record, however, contains undisputed evidence that the surgery center fulfilled this promise. Smallwood testified that Charland spoke to McAuliffe when she complained to him about McAuliffe’s actions. Charland also testified that he spoke to McAuliffe on a number of occasions and admonished her to cooperate with Smallwood. He asserted that at least on one occasion McAuliffe was written up for being uncooperative.

Smallwood claims that she would not have accepted the director of CQI/UM position had she known that the director of CQI/UM position was experimental. This argument is without merit because the undisputed evidence in the record shows that she knew the director of CQI/UM was a newly created position without clearly defined duties. Smallwood testified that she knew that the director position was a newly created position and she never asked for any assurance that this position would not be terminated. There was no promise that the director position was secure or that its continuance was unrelated to McAuliffe’s position. Additionally, the record indicates that the surgery center did not know at the time it offered Smallwood the position that McAuliffe’s position would be terminated or that Smallwood’s position would be terminated if McAuliffe did not perform her job satisfactorily. A promissory fraud claim can only survive in a false promise of employment case where “the defendant did not intend to perform the promise when it was made.” (Helmer v. Bingham Toyota Isuzu, supra, 129 Cal.App.4th at p. 1130.)

Smallwood also points to facts about her prior job to support her claims of promissory estoppel and promissory fraud. She maintains there was no evidence that Smallwood’s former job as the manager of the recovery room was tied to McAuliffe’s job performance, that her former job was in jeopardy at the time the surgery center offered her the director of CQI/UM position, or that her manager position was about to be eliminated. As already discussed, Smallwood’s manager position was at-will and could have been terminated without any reason; therefore, her acceptance of the director position did not result in any change in the at-will status of her employment. There is no evidence that the surgery center induced Smallwood to accept the director of CQI/UM position by telling her that her manager job was in jeopardy if she did not accept the new position. Thus, this evidence regarding Smallwood’s prior work as the manager of the recovery room is irrelevant to her claims of promissory estoppel and promissory fraud.

The final case cited by Smallwood, Agosta, supra, 120 Cal.App.4th 596, is also unavailing. In Agosta, the trial court granted the employer’s motion for summary judgment on a claim for fraudulent inducement of contract of employment based solely on an at-will provision in the employee’s compensation plan. (Id. at p. 603.) The employer defendant allegedly lured the plaintiff into accepting a job with the defendant by misrepresenting the length of employment and compensation terms. (Id. at pp. 602-607.) The court held that the employee’s at-will status did not eliminate the plaintiff’s claim of detrimental reliance based on intentionally promising compensation terms the employer never intended to honor. (Id. at p. 607.) As already stressed, here, Smallwood does not allege any damages unrelated to the termination of her employment. Additionally, the surgery center did not give written or oral promises inconsistent with Smallwood’s at-will employment.

Accordingly, we conclude that the record supports the lower court’s finding that Smallwood failed to raise a triable issue of fact regarding her claims for promissory fraud or promissory estoppel and her claims therefore fail as a matter of law.

C. Smallwood’s Claim for Intentional Concealment

Smallwood claims that the record establishes that the surgery center told her just enough about the director of CQI/UM position to encourage her to take it, but not enough information to permit her to make a truly informed decision. She claims that the failure to disclose the connection between the new position and the satisfactory performance of McAuliffe in her director of nursing position as well as the fact that Smallwood had only three months to help McAuliffe improve her performance supported her claim for intentional concealment.

“[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealedor suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612-613.)

As the trial court found and the record supports, the only evidence in the record is that the surgery center, at the time it asked Smallwood to take the director of CQI/UM position, had not yet considered terminating McAuliffe’s employment and had not assessed what that would mean for the director of CQI/UM position. Charland testified that the first time he considered terminating the director of CQI/UM position was when it became apparent that he was going to eliminate McAuliffe’s job. He explained: “When it became apparent that I was going to have to eliminate Suzanne McAuliffe, it also became apparent that there would not be a position for Ann Smallwood as well because recruiting a new director of nursing would be recruiting the director of nursing that would perform both functions.” He stated that the decision to discharge McAuliffe was not made until the week she was fired. He elaborated: “At the time that the position of director of CQI/UM was created, there was no thought in my mind that Ms. Smallwood’s position would be eliminated. There was no thought in my mind that Suzanne McAuliffe would be terminated. So I had not even the slightest idea that the situation would arise where Suzanne McAuliffe would be terminated.” He added, “It didn’t occur to me.” Thus, there is nothing in this record that raises any inference that the surgery center concealed a material fact.

Smallwood points to Charland’s declaration where he described the director of CQI/UM position as experimental as showing that the surgery agency knew that the position might not be permanent. She maintains that, if she had known that, she would never have accepted the position.

Charland explained that, by using the word “experimental, ” he meant that the surgery center was creating a new position; a position that was “an untried, unproven, [and] untested position.” The record shows that Charland told Smallwood that the position was newly created. Smallwood testified that Charland told her that the surgery center was creating a new position of director of CQI/UM and that he did not have “a clear idea of what the duties would be other than [the director] would be lateral to [McAuliffe].” Additionally, Smallwood stated that when Elleson called her to encourage her to take the position that she felt “a little excitement at the fact that this ‘was’ a new job, something ‘she could’ create on ‘her’ own.”

Smallwood argues that the fact that the surgery center told her that McAuliffe’s position of director of nursing and her position of director of CQI/UM were lateral positions indicated that the positions were equal and that the performance for each position would be independent of each other. As already explained, this statement simply indicated that Smallwood’s position had the same status as McAuliffe’s position and that she would not be under McAuliffe. Indeed, there is no evidence that Smallwood’s position was subordinate to McAuliffe’s position.

Smallwood again stresses that there was no probationary period for her job and she told Charland of her intent to work for a few more years rather than retire and she claims that both of these factors indicated that the director position was a permanent one. She maintains that she would not have accepted the position if she had known she was simply going “to be part of some grand experiment.” It may be that Smallwood believed her job was permanent, but Smallwood has provided no evidence that the surgery center knew the position was going to be temporary. Smallwood contends that “it defies logic to conclude” that the surgery center had not considered that Smallwood’s position was interconnected to McAuliffe’s position. However, to defeat a summary judgment motion, Smallwood has the burden of presenting evidence. Smallwood has not provided circumstantial evidence to raise an inference but has merely provided her own speculation or belief about what the surgery center knew at the time it offered her the position.

D. Reckless Representations

Smallwood maintains that representations made recklessly without knowledge of their falsity are sufficient to establish scienter for fraud and such statements are the equivalent of intentional misrepresentations. We conclude that this argument lacks merit.

“A complaint for intentional misrepresentation may allege either ‘the [defendant’s] actual knowledge of the false or baseless character of its [statement]’ or the [defendant] had ‘ “no belief in the truth of the statement, and [made] it recklessly, without knowing whether it is true or false....” ’ ” (Nutmeg Securities, Ltd. v. McGladrey & Pullen (2001) 92 Cal.App.4th 1435, 1448, fn. omitted.) A representation ordinarily will give rise to a cause of action for fraud or deceit only if it is a representation of fact rather than opinion. (Civ. Code, §§ 1572, 1710.) Other than narrow exceptions not applicable here, predictions as to future events are deemed opinions and cannot be the basis for intentional misrepresentations. (See, e.g., Cohen v. S & S Construction. Co. (1983) 151 Cal.App.3d 941, 946.)

Smallwood reiterates the same arguments when asserting that the surgery center made reckless representations. She maintains that the surgery center must have known at the time it asked Smallwood to accept the director of CQI/UM position that it may not be a permanent job and that its existence was tied to McAuliffe’s satisfactory performance of the director of nursing job. She contends that the surgery center’s failure to disclose these facts to her combined with other statements––such as her position had no probationary period––were recklessly deceptive. As already discussed, there is nothing in this record to show that, at the time it offered Smallwood the director of CQI/UM position, the surgery center knew or believed this job would be discontinued in a few months. The record contains no evidence that the surgery center made any misrepresentation of facts without any belief or basis for believing these facts.

DISPOSITION

The judgment is affirmed. Smallwood is to pay the costs of appeal.

We concur: Haerle, Acting P.J.Richman, J.

Additionally, the surgery center’s brief filed in this court did not include at the beginning a table of contents and a table of authorities in violation of California Rules of Court, rule 8.204(a)(1)(A). Further, the cover of that brief was not yellow as required by California Rules of Court, rule 8.40(b).

Actually, the trial court does have the inherent authority to reconsider its own motion sua sponte. (Le Francois v. Goel, supra, 35 Cal.4th at pp. 1096-1097, 1105.) When a trial court rules on a second summary judgment motion that is essentially the same as the first summary judgment motion, the trial court is reconsidering sua sponte its prior order. (See Neito, supra, 181 Cal.App.4th at p. 74.) Here, we need not consider whether the court could properly reconsider the first summary judgment motion because we conclude that the issues decided in the second summary motion were not identical to those raised in the first summary judgment motion.


Summaries of

Smallwood v. Fremont Surgery Center Medical Clinic, Inc.

California Court of Appeals, First District, Second Division
May 25, 2010
No. A124901 (Cal. Ct. App. May. 25, 2010)
Case details for

Smallwood v. Fremont Surgery Center Medical Clinic, Inc.

Case Details

Full title:ANNA MARIE SMALLWOOD, Plaintiff and Appellant, v. FREMONT SURGERY CENTER…

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

Date published: May 25, 2010

Citations

No. A124901 (Cal. Ct. App. May. 25, 2010)