Faigin v. Signature Group Holdings, Inc.
211 Cal. App. 4th 726
Cal. Ct. App.2012Background
- Faigin worked for Fremont General and its subsidiaries, including FRC, since 1990 and held senior legal positions; he had a written three-year contract with Fremont General in 2007 giving three years base salary upon involuntary termination; Faigin informed FRC of objections to new management in 2007; Faigin was replaced and formally relieved of his positions by the FRC board in December 2007; he continued some work for Fremont entities and earned a salary until March 2008 but was terminated for cause by Fremont General in March 2008; Faigin pursued arbitration and then a civil action alleging breach of contract and related claims; the jury found Faigin was an FRC employee, that FRC breached an implied-in-fact contract to terminate only for good cause, and awarded $1,347,000 in damages; the court denied prejudgment interest and posttrial motions, and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of employer-employee relationship | Faigin was an FRC employee; evidence supports employment. | There was no substantial evidence Faigin was an FRC employee. | Substantial evidence supports Faigin as an FRC employee. |
| Existence of an implied-in-fact agreement to terminate only for good cause | Totality of circumstances shows such an implied agreement. | No implied agreement could arise legally given the written Fremont General contract. | Existence of implied-in-fact agreement to terminate for good cause upheld. |
| Adequacy of consideration for the implied agreement | Continued employment constituted consideration. | Faigin’s obligations under the Fremont General contract negate consideration. | Courts found substantial evidence of consideration; not error. |
| Effect of the cease and desist order on the implied agreement | Order did not preclude an implied agreement. | Order barred implied terms absent FDIC approval for new arrangements. | Order did not bar the implied-in-fact agreement; valid under record. |
| Award of prejudgment interest under Civil Code 3287(b) | Interest should accrue from filing due to unliquidated claim. | Denial was reasonable given changing damages and windfall concerns. | Denial of prejudgment interest affirmed. |
Key Cases Cited
- Guz v. Bechtel National, Inc., 24 Cal.4th 317 (2000) (implied-in-fact employment and job-security assurances considered in totality of circumstances)
- Agosta v. Astor, 120 Cal.App.4th 596 (2004) (express contract may preclude implied-in-fact terms)
- Eisenberg v. Alameda Newspapers, Inc., 74 Cal.App.4th 1359 (1999) (implied terms and at-will considerations)
- Camp v. Jeffer, Mangels, Butler & Marmaro, 35 Cal.App.4th 620 (1995) (conflict between implied contracts and express writings)
- Shapiro v. Wells Fargo Realty Advisors, 152 Cal.App.3d 467 (1984) (principles on express vs. implied contracts; inconsistent terms)
- A&M Produce Co. v. FMC Corp., 135 Cal.App.3d 473 (1982) (unliquidated damages and prejudgment interest standards)
- General Dynamics Corp. v. Superior Court, 7 Cal.4th 1164 (1994) (assurances of job security and implied contracts in employment)