*1 S044234.Jan. [No. 1996.] LAZAR, Petitioner,
ANDREW v. COUNTY, THE SUPERIOR COURT OF LOS ANGELES Respondent; INC., RYKOFF-SEXTON, Real Interest. Party *4 Counsel Morrison, Ross,
Ross Morrison, & Miller, B. Gary Andrew D. Schulman & A. Schulman Barry Miller for Jerry Petitioner. Jaramillo, Posner,
William G. Luis Hoerger, Quackenbush & Joseph Quackenbush and Quackenbush William C. as Amici Curiae on behalf of Petitioner.
No appearance Respondent. Gibson, Crutcher, Dunn & Martin C. Washton and F. Webb for Real Jeffrey Party Interest.
Musick, Garrett, Peeler Simmons, & Richard J. Michael G. Morgan, Foerster, Morrison & Jr., Wilcox Kirby and James E. as Amici Boddy, Curiae on behalf of Real in Interest. Party
Opinion
WERDEGAR, J.
review in
granted
this matter to
We
clarify, following
our
decisions
v.
Foley
Interactive
(1988)
Data Corp.
635 211, (1993) 765 P.2d and Hunter Cal.Rptr. (Foley) v. Inc. Up-Right, 373] 8, (Hunter), Cal.4th 1174 864 P.2d Cal.Rptr.2d whether or under [26 88] what circumstances a state a cause of plaintiff may action for fraudulent inducement of contract. The Court of concluded the Appeal of the in this allegations case are to state such plaintiff a cause of adequate follow, action. For the reasons that we affirm the agree. Accordingly, of the Court of judgment Appeal.
I. Background Because this matter comes to us after trial court sustained the demurrer, must, defendant’s “we under established assume the principles, truth of all material properly pleaded allegations in evalu complaint of the decision below. ating validity” v. (Tameny Atlantic Co. Richfield 167, 839, 1330, 27 Cal.3d 610 P.2d Cal.Rptr. 9 A.L.R.4th 314]; see also 493, Alcorn v. Anbro Inc. Engineering, Cal.3d 88, 216].) Cal.Rptr.
Andrew Lazar alleged follows: Lazar was bom in New York in He 1950. lived and worked in Long Island, New York until From 1990. 1972 to he was with a employed family-owned restaurant equipment As of he company. was president *5 $120,000 of the company, earning New York with annually living his children, wife of 21 years his 17 and 15. ages In September vice-president real in interest party Rykoff- Sexton, Inc. (Rykoff defendant) contacted Lazar and tried to him persuade to come to work in Los as Angeles Rykoff’s West Coast general manager and, contract design. later, Rykoff, its through its vice-president through officer, president and its chief executive recmited Lazar intensively through 1990. For February recruitment purposes, Rykoff brought Lazar and his wife offices, to Los to visit Angeles to Rykoff’s visit realtors and to see the city. During this recmitment process, Lazar told Rykoff he was concerned about to Los relocating as the Angeles, move would entail relinquishing secure job of the president family where he had worked all his company life, adult his separating children from their an friends at time of important their lives and his home of leaving aAs condition of to years. agreeing relocate, Lazar s assurance that required Rykoff his would be secure and job would involve significant increases. pay concerns,
In response Lazar’s made Rykoff to Lazar representations that led him to believe he would continue to be so employed by Rykoff long
as he his performed and achieved job goals. Rykoff represented that Lazar would continued enjoy advancement within the organization, would be and, welcomed as as a part Rykoff “family” would Rykoff employee, and a future. enjoy security strong that Rykoff Lazar would have represented a long-term with the relationship company. Additionally, Rykoff implied current head of the in which department Lazar would work had plans retire and Lazar would be groomed to assume that position.
Rykoff further that the represented was company very strong financially stable, solid anticipated and a growth future. In profitable particular, Rykoff represented which Lazar department would work was a division within the growth and that company had Rykoff it. plans expand $130,000 also stated Rykoff and, would Rykoff Lazar pay to start if annually Lazar his performed $150,000. income job, yearly would rise to quickly told Rykoff Lazar he would receive annual reviews and raises accordingly. contract, Lazar asked for a written employment but was refused. Rykoff stated a written contract was unnecessary because “our word our bond.” In or about Lazar February offer of accepted Rykoff’s on terms including foregoing.
Rykoff’s to Lazar representations the terms on which he would regarding retained, be financial health Rykoff’s and Lazar’s potential compensation and, them, were false when making Rykoff’s knew were agents they false. had in Rykoff the immediately preceding its period experienced worst economic performance recent and the history, financial out- company’s look fact, was pessimistic. Rykoff an planning operational merger that would eliminate Lazar’s had no position. Rykoff intention of retaining Lazar so Instead, as he long performed adequately. Rykoff secretly intended to treat Lazar as if he were an “at will” employee, to termination subject without cause. knew Rykoff the promised compensation increases would not be given, as limited company policy annual increases 2to to 3 percent. *6 Based on Rykoff’s representations, Lazar his New York resigned position and, in commenced May month, The employment Rykoff. following Lazar a home in bought California and moved his there. family
Lazar his performed job in an Rykoff manner. He obtained exemplary sales increases in his assigned and soon after he region, commenced employ- ment his West Coast region achieved its sales for the first budget time. Lazar accomplished continued improvement sales and lowered overall operating costs within his department. In April failed to Rykoff Lazar pay certain bonus to compensation
which he had become entitled under a incentive company Subse- program. quently, Lazar was July, terminated. told Lazar Rykoff his was job being A vice-president owing management reorganization. Rykoff eliminated not told related and was cause. performance Lazar his was The further stated Lazar could leave the company Rykoff vice-president with of by regular a letter dignity tendering resignation keeping (and status of for three months so that he job all appearances stability) fact, could better for a new a desk given Rykoff’s search Lazar job. warehouse, an where noise from forklifts made use absur- telephone The fact a secret and dity. Lazar was was not maintained as leaving Rykoff became common Lazar has been unable to find knowledge. comparable employment.
As a of conduct and Lazar’s reliance on Rykoff’s Rykoff’s consequence Lazar lost and future representations, income benefits. past He lost with contact the New York market so that reemploy- ment there is difficult or Lazar is burdened with on impossible. payments Southern California real estate he can no afford. Lazar and his longer family distress, have experienced emotional with both psychological physical manifestations.
Lazar further alleged acted with Rykoff malice oppression, within the of meaning Civil Code section 3294.
Based on these Lazar allegations, (1) set forth causes of action for: violation of (false Labor Code section induce reloca- representations tion), (2) wrongful termination violation public (3) fraud and policy, deceit, (4) contract, negligent (5) (6) breach of misrepresentation, promis- sory distress, intentional infliction estoppel, of emotional negli- infliction of gent emotional distress.
Rykoff demurred to all causes action the Labor and breach except Code of contract claims. The trial court sustained demurrer in its Rykoff’s entirety amend, without leave to Lazar with leaving Labor Code section only and breach of contract causes of action. Lazar recon- unsuccessfully sought sideration, (Lazar then writ of mandate. did seek the trial review court’s sustaining demurrer to Rykoff’s his cause of action for promissory estoppel.)
The Court of Appeal issued a writ of mandate directing superior court order, to vacate its insofar as it sustained demurrers Lazar’s Rykoff’s *7 causes of action termination in wrongful violation of fraud public policy, deceit, negligent and intentional misrepresentation, infliction emo- distress, tional and to enter newa order to demurrers those overruling causes of action.
638 granted Rykoff’s
We for review. petition Subsequently, specified whether, the issues to be would be limited to argued or under what circum- stances, state a plaintiff cause of action for fraudulent inducement of may Court, (Cal. 29.2(b).) contract. Rules of rule
II. Discussion A. Promissory fraud deceit,
“The elements of which rise the tort action for give (a) (false concealment, are misrepresentation or nondisclo representation, defraud, i.e., sure); (b) (c) (or ‘scienter’); intent to knowledge falsity reliance; reliance; (d) induce (e) (5 justifiable Wit resulting damage.” kin, Torts, 676, 778; (9th 1988) of Cal. Law ed. Summary see also Civ. § Code, 1709; Hunter, 1174, 1184; Molko v. Holy Spirit § 1092, (1988) 122, Assn. 46 Cal.3d 1108 46].) 762 P.2d Cal.Rptr. [252 is fraud” of the action for “Promissory fraud and deceit. subspecies A to do promise the intention to something necessarily implies perform; hence, intention, where a is made without such there is an promise implied (Union of fact that be misrepresentation actionable fraud. Flower may Market, Market, v. Ltd. Southern (1938) Flower Inc. 10 Cal.2d California 671, 503]; Code, 1710, Witkin, 676 P.2d (4); see Civ. 5 subd. [76 § Law, 685, of Cal. 786-787.) Summary § An action for lie where a promissory may defendant fraudulently (Chelini induces the to enter plaintiff (1948) into a contract. v. Nieri 32 480, Cal.2d 487 P.2d of deceit” where adequately pled [196 [“tort 915] plaintiff “defendant intended to alleges and did induce plaintiff employ him by (since ... he making promises did intend to he knew he could not) (fn. omitted)]; Kuchta v. Allied perform” (1971) Builders 21 Corp. 541, 588], Cal.App.3d 549 Horn v. Cal.Rptr. citing Guaranty Chevrolet [98 (1969) 477, Motors 871]; 270 484 Cal.App.2d Cal.Rptr. Squires Dept. [75 Store, 320, Inc. v. (1953) Dudum 115 418].) P.2d Cal.App.2d [252 cases, such claim does not whether plaintiff’s the defend depend upon ant’s enforceable, enforceable as a promise ultimately contract. “If it is least, . . . has [plaintiff] a cause of action in tort as an alternative at in some perhaps instances addition to his cause of action on the contract.” (Rest.2d Torts, 530, c., 65, (1), subd. com. cited with approval § Tenzer 18, 130, v. Superscope, Inc. 39 Cal.3d Cal.Rptr. 702 P.2d 212].) however, Recovery, be limited the rule double recov may against of tort and ery contract v. compensatory damages. (Tavaglione Billings Cal.4th 574].) Cal.Rptr.2d *8 true,
Lazar’s if would establish all elements of allegations, that, above, As detailed Lazar order induce alleges fraud. promissory California, him to come to work intentionally represented him Rykoff be so as he his he he would by long performed job, employed company receive increases in and the was company would significant salary, strong false, Lazar further that were alleges Rykoff’s financially. representations and he on them in secure New York leaving relied justifiably employment, market, York his connections with the New severing employment uprooting his and a California home here. family, purchasing moving
Lazar knew Rykoff its terms alleges representations regarding be which he would retained in Rykoff’s potential upon employ, salary increases and the financial false at the strength company were time that, were also they made. He the time to him alleges Rykoff represented secure, would job be an permanent Rykoff planning operational merger to eliminate Lazar’s no likely had intention of job, Rykoff Instead, him as he long so Lazar retaining performed adequately. alleges, to treat if he Rykoff intended him as were to termination secretly subject without cause. further Lazar knew the alleges Rykoff purported potential materialize, salary increases would because was to limit company policy annual increases to 2 or 3 percent. allegations These state a cause adequately of action for fraud as promissory traditionally understood.
Rykoff and
as amici curiae in
employers’ groups appearing
support
Rykoff contend Lazar’s fraud action is barred
our decisions in
Foley,
Hunter,
that,
Cal.3d
After cursory the Court of “Hunter did not Appeal all preclude fraud claims in the context. It bars merely limited of fraud claims category arising from employer misrepresentations which are made to effect termination.” We Court agree with the of Appeal’s claim, disposition Lazar’s permitting but believe an adequate explana- tion that result a somewhat fuller requires and clarification of explication addition, our rationale in In Hunter. we believe mistaken Rykoff is about the degree which the policy considerations our decision in Foley underlying apply fraudulent inducement of contract cases.
B. Hunter we considered whether terminated employee recover tort may for fraud and on predicated deceit *9 Hunter, welder, used to effect the
misrepresentation termination. a was told his falsely by supervisor decision to corporate eliminate his position (Hunter, 1179, been had made. 6 Cal.4th supra, 1186.) at After pp. being refused an to work in a lesser opportunity within the position company, Hunter a document (id. forth his signed setting 1179.) at The resignation, p. found that Hunter’s jury had Up-Right, breached an employer, implied contract not to dismiss him without cause. good We noted that Up-Right could have Hunter’s termination accomplished directly the risk of (incurring contract and had liability only) merely introduced the element of misrepre- sentation in the (Id. course of 1184.) result. at effecting Hunter, therefore, could not be said to have “relied to his detriment on the misrepresentations (Id. 1184.) constructive dismissal.” suffering at p. these Analyzing circumstances light Foley, supra, and of the tradi- tional elements of we concluded wrongful deceit, does not ordinarily rise to a cause of give action for fraud or if even is utilized to misrepresentation (Hunter, effect the termination. supra, 1178.) Cal.4th at We reasoned p. that “such representations are merely i.e., means to the end desired by termination of employer, employment.” (Id. 1185.) The effect of Up-Right’s misrepresentation simply transform Hunter’s into a resignation (Id. constructive termination. at p. in Hunter
Seizing upon language tort indicating available recovery only “when the fraud cannot be said plaintiff’s to result from [the] (Hunter, termination itself’ 1178), at p. Rykoff argues Hunter, therefore, Lazar’s damages resulted from his termination and that bars recovery. According to for Rykoff, Hunter stands the general that terminated proposition should be limited employees to contract damages and, after a terminated can obtain tort employee damages only by alleging termination violated a fundamental of the state. public policy We disagree.
First, on its face Hunter does not
Lazar’s fraud claim. As
preclude
out,
Lazar
correctly points
left
in Hunter the
expressly
open
possibility
“that a misrepresentation not aimed at
termination of
effecting
employment,
but instead
to induce
designed
the employee to alter
his or her
detrimentally
position
some other respect,
form a basis for
might
a valid fraud claim
even in the context of a wrongful
(Hunter,
termination.”
Indeed, this despite court’s division over the issue of tort for recovery termination, all seven members of the court used effect misrepresentation either that the action impliedly agreed promissory expressly remains viable context. Panelli, J., Lucas, J., Baxter, J., J., fn. 1 C. (maj. George, opn. *10 fraud,
conc.) is not a case of this promissory nothing opinion [“This the of tort case in which the elements of affects availability (dis. 1188 fraud are id. at p. opn. promissory pleaded proved.”]; Mosk, J., Arabian, J., conc.) cases of fraud . . . both the promissory [“[I]n breach and the fraud to the breach are leading separately [of contract] Kennard, actionable.”]; (dis. J.) id. at the 1197 ... opn. p. [“[W]hen conduct is not within the of the contractual employer’s scope the “defrauded is entitled to recover tort relationship” employee damag discussed, es.”].) As Lazar has previously cause of action adequately pled fraud. promissory it is Looking clear the rationale for our decision in Hunter does deeper, Hunter, not to this case. In apply while we identified a situation in which a terminated was unable to all of the elements of did employee we plead not intend to call into thereby the of traditional question generally viability fraud remedies whenever are a terminated Our they sought by employee. decision in Hunter was not meant to alter the law of fraud or fundamentally it suggest in the necessarily applies differently context than Rather, in other contexts. we traditional fraud in the context applied analysis of a termination “desired where by employer,” misrepresentation was termination, introduced “in the course of’ only the desired effecting where the “could have employer accomplished directly.” [the termination] (Hunter, 1179, 1184, 6 Cal.4th at supra, 1185.) pp. Under such circum- stances, concluded, the Court of “erred in had Appeal inferring” (Id. had employer 1184-1185.) committed a fraud. at pp. situation,
Hunter dealt with a situation of the usual fraud in that atypical there the alleged (the the fraud defendant perpetrator employer, Up-Right) attempting it had accomplish by deception something actually power to accomplish (See forthrightly—termination the plaintiff’s employment. Hunter, 1184-1185.) supra, Hunter's rationale does not because, extend readily the termination beyond context in the ordinary case, the alleged of the perpetrator fraud lacks the his power accomplish objective without resort to duplicity.
We reasoned in Hunter that “no fraud claim” arose from independent Up-Right’s (Hunt- aimed at “misrepresentation termination of employment” er, supra, 1185), 6 Cal.4th at because Hunter could p. all allege (See Witkin, elements of fraud. 6 Cal.4th at citing p. Law, Torts, 676, 778; Code, 1709; of Cal. Civ. Summary p. § § 958].) Hobart v. Estate Co. Hobart Cal.2d as we could not Specifically, explained, Hunter detrimental reliance. allege (Hunter, 1184.) Cal.4th at supra, 6 noted,
We initially, that Hunter could not be to have said relied to his detriment on his employer’s because “sim misrepresentation, employer falsehood to it ply do what otherwise could have employed accomplished is, (Hunter, 1184.) directly.” supra, Cal.4th That Hunter’s employer him, had the to terminate power We further noted that rightly wrongly. some used in the course of a dismissal are misrepresentations “merely i.e., means to the desired end termination of employer, employment.” would, Had Hunter not he resigned, *11 event, been have in we presumably, a fact discharged any implicitly recog nized in “the that result of is noting Up-Right’s indistin misrepresentation guishable (id. from an constructive ordinary termination” wrongful ; 1184) in (id. termination as “aim” “desire” describing Up-Right’s at p. ; 1185) and in that the element of recognizing was intro misrepresentation duced by (Id. “in the course of’ Up-Right only Hunter’s dismissal. at p. 1178.) Hunter himself testified told he was he would be terminated if he did (Id. 1179.) not resign. p.at short,
In because had both the and intention of Up-Right power discharg event, him in no ing Hunter worse off for induced any was being Up-Right’s to While have misrepresentation resign. Hunter relied on may while in Up-Right’s misrepresentation, and reliance thereon he allegedly (from changed his to his reliance did not position employed unemployed), detriment, cause (See him the tort v. Sheehan requires. Hull 704]; P.2d Bramaric v. Churich Cal.App.2d 657].) Cal.App.2d Hunter could not Accordingly, plead element, said, detrimental reliance. this we Lacking his fraud claim was (Hunter, 1184). “without substance.” at p. contrast, as reliance
By Lazar’s on alleged, Rykoff’s misrepresen detrimental, tations was that he such all the elements truly may plead fraud. Lazar’s not have to employer, did Lazar to Rykoff, compel power leave his former were employment. made be Rykoff’s misrepresentations formed, fore the had when no coercive relationship Rykoff over decline power Lazar Lazar was to free the offered position. Rykoff used to induce Lazar to result misrepresentations a change employment, Rykoff (because could presumably not have achieved Lazar had truthfully required assurances the Rykoff would be secure would involve position Moreover, in significant increases Lazar’s to pay). join decision left Rykoff in he would have found than those which Lazar in worse circumstances Lazar’s secure (Allegedly, living had not lied to him. Rykoff himself of a were and Lazar became the employee circumstances working disrupted, to him as an at-will troubled which intended treat financially company, employee.) sum, (that substantial fraud claim could Hunter’s core rationale absent) detrimental
not
reliance was
does not
be
because the element of
pled
to this
As
Lazar’s reliance was
detrimental.
apply
truly
case.
alleged,
Hunter does
Contrary
deciding
our rationale
Rykoff’s arguments,
tort
case
a termination. While
preclude
recovery
every
involving
Hunter,
our
it would
rationale
indicated
previewing
support
with
to a
that is
from
recovery “only”
respect
misrepresentation
“separate
(see
the termination of the
contract”
Thus, Hunter does not bar Lazar’s fraud claim. Foley
C. our 47 Cal.3d that the Rykoff suggests recognition, Foley, supra, contractual” employment relationship “fundamentally (Foley, supra, p. 696), with references in coupled Hunter to economic considerations policy (see 1180-1182), we invoked in Foley implies should be limited to contract for employees generally employment terminations. tort remedies in the Rykoff argues permitting employment context is and and the reasons for unnecessary extraordinarily costly, policy which we declined to extend tort relief in with force Foley apply equal claim Lazar’s for fraudulent inducement of
against employment contract. (See 693.) at Cal.3d
Foley addressed whether remedies should be available for employ ment terminations that the allegedly breach covenant of faith implied good fair At dealing. issue was whether the employment relationship of similar to that insurer and insured to “sufficiently warrant exten judicial sion additional tort remedies” breach of the proposed implied covenant of faith and fair in an contract. good dealing employment (Foley, 693.) extension, We Cal.3d declined to make that view “in of the concerns about economic countervailing the tradi policy stability, law, tional of tort separation and contract the finally, numerous protec tions against improper (Ibid.) terminations afforded already employees.”
Thus, the issue in was whether to the Foley existence acknowledge (i.e., previously unrecognized cause action tortious breach of the implied covenant of faith and context). fair in the good dealing employment
The issue this case is whether we should restrict availability traditional tort remedies when are in the context. In they sought Foley, recognized “the extension of . .. tort remedies” [available] had “the proposed by to alter plaintiffs potential nature of profoundly services, the cost of and the employment, products availability jobs.” (Foley, 47 Cal.3d at We concluded such extension is Here, (Ibid.) contrast, “better suited for legislative decisionmaking.” court, defendant’s this in order suggestion to optimize California’s business climate for should employers generally, restrict of tort rem application context, traditionally edies available would seem urge us a upon quasi-legislative such as we enterprise Foley. refused In declining expand tort remedies for judicially breaches of the implied *13 covenant in we Foley, alluded to the need for courts to practice restraint when asked to fashion new remedies in the areas of law already governed by “numerous legislative and to a provisions” subject “diversity possible (Foley, case, solutions.” 47 supra, Cal.3d at in p. this Similarly, should be mindful that Legislature our more a than codified the century ago common contract, law cause of action for fraud in a promissory inducing with actions for along fraud and promissory (See Civ. generally. Code, 1572, 4, 1709, 1710.) subd. These statutes no express provide §§ or exception employers employees. restraint such Accordingly, judicial as we exercised in counsels Foley the fraud against traditional disallowing claim in this pled case. in
Our concern not to create Foley “potential recovery every (47 [discharge] 696) here, case” Cal.3d at does not p. weigh heavily
645 of action. In Cali traditional fraud cause alleges a plaintiff where do fornia, conclusory allegations be and general must pled specifically; 59, (1990) 74 220 Cal.App.3d v. (Stansfield Starkey [269 not suffice. 1262, 337]; 210 1268 (1989) Cal.App.3d v. Nagy Nagy [258 Cal.Rptr. 1985) 662, Witkin, (3d 787]; Pleading, ed. pp. 5 Cal. Procedure Cal.Rptr. § ‘ . . . 111-112.) of liberal construction pleadings “Thus “the policy to a defective in material any be invoked sustain pleading will not ordinarily ’ necessitates pleading This particularity requirement respect.” [Citation.] HD whom, when, where, how, what the to and means by ‘show which facts ” 73, 220 were (Stansfield, supra, Cal.App.3d p. tendered.’ representations a against a fraud claim A burden asserting italics original.) plaintiff’s case, a the must plaintiff “allege even In such greater. is employer corporate who the fraudulent allegedly representations, the names of made persons wrote, they to to whom what said they spoke, their authority speak, (Tarmann v. Farm Auto. Ins. Co. it said or written.” State Mut. when was 153, 861].) 2 157 Cal.App.4th Cal.Rptr.2d not for exempting Our decision does Foley authority employers provide fact, from fraud rules Californians ordinary generally. apply s as we held entire thrust is to insofar contrary employers Fole' Cal.3d at 693 ordinary, rather than standards. special, (Foley, not standard [holding governed relationship” are employers by “special Moreover, insurers].) while lawsuit that names an em applicable the same general range as defendant ployer theoretically implicates economic discussed in those consid Foley, policy considerations we policy in fraud erations do not with the same force case. necessarily apply of con to defendant’s fraudulent inducement Contrary arguments, tract—as the context where the “traditional very phrase suggests—is 693; of tort contract 47 Cal.3d at (Foley, law” separation 1181) obtains. this area of the supra, Cal.4th To the contrary, law has involved both contract and tort traditionally principles proce dures. For rule long it has been the that where a contract secured example, fraudulent elect to affirm the representations, injured may party contract sue for the fraud. v. Birch Cal.2d (Campbell Law, Torts, 902]; Witkin, see of Cal. generally, Summary 825-826.) § *14 of
Defendant that for fraudulent inducement claims opines barring contract, in of light “existing against protections improper 1182, Hunter, (see Foley, terminations” 6 supra, citing supra, Cal.4th at p. 692-693), 47 the Cal.3d at would leave well But pp. protected. employees resolution here the cause of inventing, involves not proposed affirming,
646 action for fraud. promissory Thus the we “existing invoked in protections” Hunter included the of necessarily availability fraud actions like promissory this one.
More fundamentally, it is a truism that contract remedies alone do
not address the full
of
range
the action
policy objectives underlying
for
action,
In
fraudulent inducement of contract.
a valid fraud
pursuing
a
in
plaintiff
public
advances the
interest
intentional
punishing
misrepresenta
in
such
in
(Cf.
tions and
deterring
future.
misrepresentations
Foley,
It that is true we our Hunter buttressed with references to analysis Hunter, some (See of the economic considerations reviewed in policy Foley. supra, 6 Cal.4th at for 1180-1182 grounds Foley's [reviewing contractual]; conclusion the id. at employment relationship fundamentally restrictions on tort for covered [reviewing recovery injuries workers Our compensation].) Hunter does contain some broad lan- opinion Hunter, (See, guage suggestive Cal.4th at Rykoff’s position. e.g., p. 1185 of a [“Recognition fraud cause of action in the context wrongful would contravene the only logic Foley, but also would cause adverse for potentially consequences industry general.”])
Nevertheless, that, reject Foley contention Rykoff’s by citing Hunter, we restricted or abandoned traditional tort remedies in employ- Instead, ment context. our reference Hunter “the of Foley" logic 1185) supra, 6 Cal.4th invoked merely Foley's holding should not be extended remedies in order “fashion judicially of a breach contract 47 Cal.3d at provision.” (Foley, hadwe concluded that a to effect termination of misrepresentation
647 fraud.” level actionable separately did “rise to the of not employment 1185.) “the result of Up-Right’s at Since (Hunter, p. 6 Cal.4th termi ordinary wrongful from an indistinguishable misrepresentation [was] (id. in enor 1184), (that, of “logic” light “potentially Foley’s nation” at p. ex tort be ought judicially remedies consequences,” mous [economic] (47 at limits) Cal.3d p. became pertinent. tended their traditional beyond 699.) with of not dealing allegations
This case is different. Here we are of fraud. was a Foley but with allegations breach of a contract provision, tort reme in we to of contract case which declined expand availability contract; are is a tort in which we asked being dies breach of this case tort remedies. defendant to constrict traditional fix our in to “Foley’s reference Hunter upon conception Defendants contractual, to only relation as rise con- fundamentally giving in the damages tractual in the event of breach absence some violation [a] 1182.) (Hunter, of a While fundamental public policy.” (id. to that in Hunter we noted we have adhered view” “continuously 1178), validate tort we were there to our consistent refusal to referring contract, not of traditional fraud remedies for breach of erosion any remedies.
Nevertheless, Hunter we extended defendant that in argues impliedly in Foley plaintiff case where the preclude recovery fails to violated fundamental Defendant allege discharge public policy. 330], Hine 228 v. Dittrich points Cal.App.3d Cal.Rptr. Cadam, Soules v. Inc. and Cal.App.4th Cal.Rptr.2d 6] 1988) (N.D.Cal. Guar. Liability American & v. Vista Medical Supply as such a instances where courts have F.Supp. recognized applied Hunter, we Hiñe to defeat the tort claims. In cited principle plaintiff’s Soules Foley, of Court of examples following suggested cases Appeal (that & Liability, conclusion American Guar. an employee’s negligent claim, arose intentional act of misrepresentation which out the employer’s her, claim), was of her discharging “part parcel” wrongful discharge “correct and to the issue before us. pertinent” that, Hunter,
Defendant to Hine and Soules in argues referring can never state a tort endorsed the that an impliedly proposition employee termination, claim other than from arising wrongful much of our mention violation Defendant makes too public policy. terms, buttressed, these Our Hunter cases. references in simply general *16 our that California courts “have adhered to recognition of Foley's conception 1182, Hine, the (Hunter, relation.” Cal.4th at employment supra, 6 p. citing Soules and American & in Liability.) Nothing Guar. Hunter’s or language committed us to wholesale of reasoning the sometimes adoption sweeping Hine, or in analyses conclusions contained Soules and American Guar. & Liability. Dittrich,
Hine v. was a Cal.App.3d negligent supervision case in which the he he plaintiff specifically alleged injury suffered no until Dittrich, (Hine 64.) was discharged. v. at In a Cal.App.3d the did of we not in of portion opinion the Court quote Appeal “As as the would not have occurred expansively opined: long alleged injury termination, but for the indicates that the Foley employee (228 65.) limited to a contractual generally remedy.” By Cal.App.3d contrast, Lazar from alleges tortious behavior which injuries intentionally before, Soules, occurred and after the actual termination. In the Court during of the use of artifice Appeal disapproved to relabel a deficient pleading Cadam, Inc., breach (Soules of contract claim. v. supra, Cal.App.4th contrast, 403-404.) By even defendant case does contend this is one of discussed, artful Lazar has the traditional pleading; alleged elements fraud. More the in promissory Soules founded his tort importantly, plaintiff claims conduct to have entirely upon alleged breached the employment (Id. contract. at p. Lazar fraudulent alleges inducement.
While in Hunter we also the approved dictum court’s conclusion in American & Guar. v. Vista Liability Supply, Medical supra, 699 F.Supp. that the in her employee’s negligent supervision claim subsumed wrong- ful termination claim 1182), did not intend thereby usurp function and legislative create new across-the-board immunity who terminate We employers wrongfully employees. agree with there is no “Foley doctrine” or plaintiff stating implying employers who terminate do should broad employees immunities from special enjoy tort liability. short, or our nothing logic Foley, discussion in subsequent
Hunter of the considerations policy Foley, California underlying suggests fraud doctrine should be revised manner defendant advo- judicially Thus, cates. bar Foley does not Lazar’s claim. fraud
III. Conclusion with Consistent toas his claim Lazar foregoing, may properly seek for the costs incurred in uprooting family, expenses relocation, with his former and income associated security and the loss however, rely facts Lazar must on York. On the as pled, New *17 caused of any allegedly by for of loss income recovery his contract claim Moreover, any with over- Rykoff. of employment termination wrongful in and recoverable con- recoverable tort damages between lap v. (Tavaglione double against recovery. be limited the rule by tract would 1159.) Billings, therefore, in the inducement
Lazar, with his claim for fraud may proceed contract, for “all the detriment of properly seeking damages Code, (Civ. 3333), well as thereby” appropriate caused proximately § Code, 3294). (Civ. exemplary damages § reasons, the of the Court of is Appeal
For the foregoing judgment affirmed. J., J., Baxter, J., J.,
Lucas, Arabian, George, C. and concurred. of the concur in I also with much MOSK, J. the judgment. agree I believe, however, I continue to that reasoning majority opinion. (1993) 6 864 P.2d Hunter v. Inc. Cal.4th 1174 Up-Right, Cal.Rptr.2d not overrule (Hunter) was decided. The do wrongly today majority 88] Hunter—indeed, because the case is factually they present distinguishable, Instead, have no occasion to do so. the more extreme view that they reject case Inc. by real in interest urged party (Rykoff), Rykoff-Sexton, to on a I logical Hunter firmer basis. remain attempt put Although unper- reasoned, suaded that Hunter is I welcome the limitation soundly majority’s of Hunter's potentially holding. broad Foley
The
view that Hunter and
v.
majority wisely repudiate Rykoff’s
Data
Interactive
373] reasons, with enforce in connection the policy any liability arising of an the identify contract. wrongful They correctly all the traditional Hunter the case as whether question present reliance, elements of are the element of detrimental specifically no detrimental reliance could be found present. They maintain that him, Hunter, “Hunter’s had the to terminate stating: rightly employer power would, . . have been resigned, . Had Hunter not he wrongly. presumably, discharged any event.... n [*] short, because Up-Right had both the event, no him in Hunter was worse discharging intention power off induced being misrepresentation resign.” (Maj. Up-Right’s ante, Thus, did detrimentally reason that Hunter opn., they him on because he Up-Right’s misrepresentation inducing resign rely in any would have been case. discharged I with of the facts of
Although disagree majority’s interpretation Mosk, (dis. J.)), (see Hunter case opn. there is no need to the merits of a case decided. But reargue already an that the central to Hunter—whether majority appear recognize question who is deceived into sue the for fraud— resigning may employee employer to a it turns on the answer fact: whether question probable would have been terminated and therefore did not anyway, rely employee *18 on the actual sense. The detrimentally employer’s misrepresentation that if an had both the intention and majority appear presume employer the an then the will be discharge employee, inevitably power employee means, either truthful or and is therefore no worse discharged by deceptive off for been deceived into But that must be having resigning. presumption rebuttable on a factual contrary showing.
Under what circumstances would an who has the employer ability intention to an nonetheless refrain from him discharge employee discharging answer, means of The is that under except by misrepresentation? surely, circumstances, some the will refrain from the em- discharging employer because it is too to do so. outright costly ployee Employers may, resort to such fraudulent when know that to termi- example, deception they nate the will lead to a lawsuit in which the employee straightforwardly would This of fraud be employee likely may prevail. species especially common in those situations in which the manager superior employee seeks to be rid of the but finds such a decision to be at variance employee, case, with official In such a the seek not may only company policy. manager lawsuits, to avoid but also the internal potential employer’s disciplinary (see, Scott v. Gas & Electric Co. processes e.g., Pacific 427, 834]) 460-461 904 P.2d the Cal.Rptr.2d by obtaining employ- circumstances, ee’s the Under these resignation through trickery. employee would not have been fired unless the could resort to likely manager decep- tion. Therefore the who reliance on such can employee resigns deception relied,” be said to have reasonable “detrimentally by any understanding The that term. would therefore have a action for fraud employee cognizable the against against manager employer. case,
In the the that all the elements of present majority rightly recognize sense, detrimental in the have including reliance traditional been in this fraudulent inducement case. properly alleged ordinary By framing terms, Hunter in narrow move in the direction of opinion majority that the whether an has acknowledging question detrimentally employee discharge in connection with a misrepresentations relied on an employer’s fact, from of the circumstances. totality to be one of determined conclusions J., Concurring. analysis with the KENNARD, agree I The at some describes following majority with the exception. the majority, this Hunter v. Up-Right, court’s underlying opinion the “rationale” length ante, opn., Cal.Rptr.2d (Maj. Inc. Cal.4th 1174 88]. law, on it is based 641-642.) now the the rationale which Hunter is but at pp. case. founded, in that dissenting opinion I in my is not well as explained Kennard, J.).) To the (dis. opn. Cal.4th 1196-1198 reason- Hunter’s may endorsing that the be read majority opinion extent however, that Hunter is I with the join majority, I do it. agree ing, case, Court of Appeal from and that the judgment this distinguishable be affirmed. should