Opinion
In this action for breach of an employment contract, a jury awarded a verdict of $81,401.70 for the employee, plaintiff and respondent Kenneth Evan Chyten, against defendants and appellants Lawrence & Howell Investments, a partnership, and its partners Arthur G. Lawrence and Lorraine Howell. Appellants appeal from the judgment entered on the verdict following denial of their motion for new trial.
Facts
For many years appellants have operated a real estate investment business. Appellants placed an ad in the Los Angeles Daily Journal for an attorney with real estate and litigation experience to act as in-house counsel. Respondent Chyten, an attorney, replied to the ad. Appellants were impressed with
At that meeting the parties negotiated terms and reached agreement. The. negotiated terms were then typed up as an agreement entitled, “Personal Services Employment Contract.”
The employment contract recited that appellants (described thereafter as Employer) “desire to secure a five-year employment commitment from” respondent (described thereafter as Employee) and that respondent “wants to formalize his employment relationship with, and secure a five-year employment commitment from” appellants. The сontract provided that “Employer shall have the sole discretion and authority to determine what specific legal services and/or business management duties are to be performed by Employee, and to supervise such duties.” The contract required that “Employee shall work exclusively for the Employer” and, upon obtaining a California real estate broker’s license, “Employee shall use such License exclusively for the benefit of the Employer.” The employer “shall accept and assume financial responsibility for any action performed by the Employee during the scope of this employment, and shall otherwise indemnify the Employee under Section 2802 of the California Labor Code.” The employer “shall purchase and maintain, at its expense such comprehensive professional liability insurance as is appropriate to cover the acts or omission of the Employee in the normal course of his employment.”
The term of the contract was five years, from August 28, 1985, until August 31, 1990. Salary was $95,000 for the first year, and increased $10,000 per year in each of the five years, culminating with a salary of $135,000 in the fifth year.
The contract’s section on “terminаtion” provided: “The Employee may be terminated only if he engages in conduct set forth in Section 2924 of the California Labor Code during the scope of his employment [Lab. Code, § 2924 provides, “An employment for a specified term may be terminated at any time by the employer in case of any willful breach of duty by the employee in the course of his employment, or in case of his habitual neglect of his duty or continued incapacity to perform it”]; if the Employee is
Respondent began work under the contract in August 1985. Three months later, in November 1985, appellants discharged respondent.
At trial appellants claimed that respondent was discharged for cause. Respondent denied that he performed unsatisfactorily, and this issue was resolved in his favor by the jury’s verdict.
For six weeks immediately after discharge respondent unsuccessfully looked for work by sending out resumes and looking in Daily Journal ads. He received a few responses but no offers. In January 1986, he opened his own practice in Century City.
Prior to trial respondent limited his claim to the first two years of the contract. At trial the evidence showed that during the remainder of the first year of the contract he earned $53,836 from his practice and during the second year he earned $65,846. The jury verdict of $81,401.70 was the exact amount requested by respondent, representing the difference between the first and second year salaries under the contract and respondent’s first and second year outside earnings, plus certain minor additional costs for which appellants were liable under the contract.
Contentions
Appellants’ numerous contentions may be grouped in three categories. Appellants contend (1) because respondent was employed as an attorney, appellants had an absolute right to discharge respondent, subject only to paying the reasonable value of the services he performed before discharge, (2) the trial court erred in excluding certain evidence relevant to mitigation of damages, and as a matter of law respondent failed to mitigate damages, and (3) the trial court committed prejudicial misconduct during appellant Lawrence’s argument to the jury on his own behalf. Finding no merit to these contentions, we affirm.
Respondent’s Right to Contract Damages
Appellants contend that, because respondent was employed as an attorney, the rule of
Fracasse
v.
Brent
(1972)
We find no merit to this argument. Although in some respects the parties had a confidential relationship and respondent had professional obligations which an attorney owes to a client, their business relationship was very different from that involved in Fracasse. The question here is the compensation due to respondent upon termination of the relationship. We hold that under the circumstances of this case the compensation rule of Fracasse does not apply, and respondent was entitled to enforce the termination provisions of the parties’ negotiated employment contract.
In
Fracasse,
a client retained an attorney to prosecute a personal injury action. The client agreed to give the attorney a contingency fee out of any recovery or settlement obtained. The client discharged the attorney, who then sued for declaratory relief alleging he had a one-third interest in any subsequent recovery. The Supreme Court held that the client had an absolute right to discharge an attorney, with or without cause. “Such a discharge does not constitute a breach of contract for the reason that it is a basic term of the contract, implied by law into it by reason of the special relationship between the contracting parties, that the client may terminate that contract at will.” (
In
Fracasse,
the attorney was retained to prosecute a particular proceeding. The client’s absolute power to discharge the attorney was partly based on Code of Civil Procedure section 284, which involves changes of attorney “in an action or special proceeding.”
(Fracasse
v.
Brent, supra,
Appellants conducted an ongoing substantial real estate investment business. Appellants advertised a position available for an employee. Respondent answered appellants’ ad, applying for the position. The termination clause was freely negotiated between parties of relatively similar sophistication and bargaining power. (See
Blank
v.
Borden
(1974)
The contract involved terms typical of an employer-employee relationship and not typical of attorney-client contingent fee contracts. The attorney here was a salaried employee, required to work exclusively for the еmployer. The employer had the sole discretion to determine the employee’s duties and to supervise such duties. The contract contemplated that respondent would perform not only legal services but “management duties” and real estate broker functions, all at the discretion of the employer, appellants. The employer was required to accept financial responsibility and maintain insurance for the employee’s conduct in the scope of employment, and to indemnify the employee.
As to compensation, respondent was еmployed for a fixed term and fixed salary.
We hold that in this very different situation, Fracasse does not require that a salaried attorney-employee be deprived of contractual employee benefits when discharged without cause.
In
Fracasse,
the Supreme Court cited the New York high court case of
Martin
v.
Camp
(1916)
Greenberg
has been followed in New York.
(Prial
v.
Supreme Ct. Uniformed Off. Ass’n
(1977)
The annotation cited in
Fracasse,
Measure or Basis of Attorney’s Recovery on Express Contract Fixing Noncontingent Fees, Where He Is Discharged Without Cause or Fault on His Part (1957)
Here respondent was employed for a specified term at a specified fixed salary. This case is even stronger than one involving a retainer paid to an
In this respect appellants misplace reliance on
Goldstein
v.
Lees
(1975)
Enforcement of the termination provisions of appellants’ contract does not deprive appellants of their absolute right to remove an attorney in whom they have lost confidence from representing them in an action or proceeding. (Code Civ. Proc., § 284;
Fracasse
v.
Brent, supra,
Mitigation of Damages
Appellants raise three issues concerning mitigation of damages. They contend that as a matter of law respondent failed to make reasonable efforts to find comparable employment. They further contend that the trial court erroneously refused to admit evidence оf respondent’s earnings during the last three years of the contract and of respondent’s lawsuit against another attorney seeking additional compensation for work respondent did during the first two years. There is no merit to these contentions.
Opening Law Practice
Respondent testified that for six weeks after his discharge he sought other employment by sending out resumes and watching ads in the Daily Journal, but received no offers. He ultimately found work by opening his own office in January 1986.
Appellants contend the evidence “does not support the verdict.” They contend respondent should have looked harder and lоnger for a job as an employee before relying instead upon opening his own practice, which they characterize as a risky venture with inevitably low early earnings.
The burden is on the employer to prove that substantially similar employment was available which the wrongfully discharged employee could have obtained with reasonable effort.
(Parker
v.
Twentieth Century-Fox Film Corp.
(1970)
Appellants had the burden of proof but produced no evidence that comparable employment was available to respondent. They cannot now claim the
Third, Fourth, and Fifth Years
Appellants contend the trial court erroneously “held” that respondent’s earnings during the third, fourth, and fifth years of the contract were irrelevant. We do not reach the merits of this issue, because it was not adequately preserved in the trial court.
All three appellants (Lawrence, Howell, and the partnership of Lawrence & Howell Investments) were originally represented by Attorney Steven L. Krongold. Prior to the commencement of trial appellant Lawrence, also an attorney, was granted permission to represent himself; Attorney Krongold continued to represent Howell and the partnershiр. Respondent’s attorney announced just prior to trial that respondent was limiting his claim to the first two years of the contract. Attorney Krongold voiced no objection. Thereafter, appellant Lawrence mentioned, “I would like to raise one point. . . . I do not know what earnings [respondent] had in the third year and the fourth year or fifth year.” The court replied, “He is not making any claim for those years, so it is irrelevant.” Krongold added, “It is just first and second year.” Lawrence said, “What I am saying is maybe he is suing on a total contract and maybe the earnings in the third and fourth or fifth year were such that thеy would bring all of his earnings for the five-year period to a sum beyond which he has no cause of action.” The court replied, “[T]hat is not the way it works. . . . The salary is set by the year .... [I]t doesn’t relate back.” Lawrence said, “/ see. . . . No problem.” (Italics added.)
Under the circumstances, appellants cannot now contend that the court’s theory of damages was wrong or that the court erroneously excluded evidence of subsequent earnings. (See
Easton
v.
Strassburger
(1984)
Lawsuit Against Attorney
In mitigating damages during the first two years, respondent performed legal work for another attorney. That attorney was called as a defense witness, testifying that during that period he paid respondent approximately $50,000. He further testified that respondent had billed him approximately $270,000 for these services, which he refused to pay. In reply, respondent testified that he had begun working for the attorney without any definite agreement on an hourly rate, and that respondent did indeed contend the attorney owed him more, which he refused to pay.
Although the court permitted this testimony as to the amounts paid to or earned by respondent, appellants now contend the court еrred by prohibiting any reference to the fact that respondent had sued the attorney for more fees. Appellants appear to contend that the fact respondent had sued for more fees increased the possibility he would obtain them, and that the jury should consider this evidence in determining whether the damages should be reduced by those claims. The trial court apparently rejected any such reasoning, on the ground the outcome of that lawsuit was speculative.
Having permitted the evidence that respondent claimed to be entitled to more fees from the аttorney and had billed him $270,000, the trial court did not abuse its discretion in excluding further evidence of a lawsuit over the fees. The trial court properly concluded the outcome of the other lawsuit
Trial Court’s Remarks During Lawrence’s Jury Argument
Following Attorney Krongold’s argument to the jury on behalf of appellants Howell and the partnership, appellant Lawrence argued to the jury on his own behalf. In just the first five transcript pages, Lawrence made eight improper arguments, to which the court sustained respondent’s objections. Lawrence referred to numerous facts not in evidence and points whiсh were irrelevant.
(Malkasian
v.
Irwin
(1964)
After sustaining an objection to Lawrence’s repetition of this improper line of argument, the court, exasperated at Lawrence’s conduct, but in an effort to allow the trial to proceed to a conclusion, said, “I’ll tell you what, Mr. Lawrence, why don’t you just take 15 minutes and say whatever you want to. You are not to say [s/c you are not going to say] anything that is relevant to any issue in this case. So why don’t we just take 12 minutes, and let’s let Mr. Lawrence say whatever he wants to say without further objection.”
Lawrence immediately reiterated the prohibited theory that there was no valid contract because respondent misrepresented his experience. Respondent’s counsel objected again, to which the court responded, “Let him say
Appellаnts contend these remarks constituted judicial misconduct, as discourteous and intemperate toward a party, and as indicating partiality. 5
Appellants did not object to the court’s remark or ask the court to withdraw it or admonish the jury. They now assert that no objection was required because the alleged misconduct was by the court itself
(Berguin
v.
Pacific Elec. Ry. Co.
(1928)
In any event, upon examination of the entire record we do not find that the remarks caused a miscаrriage of justice requiring reversal of the judgment.
(Ward
v.
DeMartini, supra,
Before jury deliberations began the court instructed the jury that “I have not intended by anything I have said or done or by any questions that I have asked, to suggest how you should decide any questions of fact or that I
Disposition
The judgment is affirmed.
Woods (A. M.), P. J., and Epstein, J., concurred.
Notes
Appellants raise this point under several different argument headings involving denial of their motions for judgment on the pleadings, for nonsuit and to limit evidence to the reasonable value of services, and denial of their requested jury instructions.
Two foreign authorities cited by appellants are also not in point.
Federal Sav. & Loan Ins.
v.
Angell, Holmes & Lea
(9th Cir. 1988)
Indeed, the contract expressly recognizes that appellants have sole discretion to determine what matters respondent will be assigned.
While this appeal was pending, appellants moved to augment the record to take judicial notice that, subsequent to the instant trial, respondent obtained a favorable judgment in his lawsuit against the attorney. We deniеd appellants’ motion to augment the record. An appellate court reviews the correctness of the judgment based on the record at the time of its rendition. Matters occurring after judgment are ordinarily irrelevant and should not be considered. (De
Angeles
v.
Roos Bros., Inc.
(1966)
Although the remarks were directed only toward Lawrence, all three appellants assert they suffered prejudice as a result. We disagree. Howell and the partnership were represented by separate counsel, who separately argued on their behalf.
