Judge: Alison Mackenzie, Case: 20STCV42875, Date: 2024-02-02 Tentative Ruling
Case Number: 20STCV42875 Hearing Date: February 2, 2024 Dept: 55
NATURE OF PROCEEDINGS: Motion of Defendants for Summary Judgment or
Summary Adjudication.
The motion for summary judgment, or, in the alternative,
summary adjudication is denied.
Background
Plaintiff
GIANCARLO INCALZA (“Plaintiff”) brings this employment case against his former employer
PORSCHE DESIGN OF AMERICA, INC. et al. (“Defendants”), alleging that Defendants
wrongfully terminated him based on age discrimination and then fraudulently induced
him to sign a severance agreement that contained an illegal no-rehire clause.
Plaintiff,
who is in his early 60s, alleges he began working at Defendants’ retail store
in Beverly Hills in 2010 and received positive performance reviews from
Defendants up until he was terminated in 2019. (First Amended Complaint (“FAC”)
¶¶ 26, 28, 38-39.) Plaintiff alleges that he “frequently” complained to Defendant
Kathy Martin (HR Manager) about Defendants’ failure to pay employees timely in
violation of the California Labor Code, but his complaints were ignored. (Id.,
¶ 33.) Plaintiff alleges that Martin, Defendant
Karsten Von Engeln (Defendants’ General Manager) and Defendant John Mansfield (“Defendants’
Head of Retail) made numerous age-related comments to him during his tenure at
the company. (Id., ¶¶ 5, 34-35.) Martin allegedly continued to make numerous
age-related comments to Plaintiff after Defendants involuntarily demoted him
from regional manager to store manager in Beverly Hills in 2018. (Id., ¶¶
37-38.)
Defendants
terminated Plaintiff in February 2019 due to alleged slow sales in the store he
managed. (Id.) At the meeting where he was terminated, Defendants Martin
and Mansfield allegedly both told Plaintiff that he was re-hireable by
Defendants. (Id., ¶ 40.a.) However, Defendants gave a severance
agreement to Plaintiff that contained a no-rehire/non-competition clause that prohibited
Plaintiff from applying to or working for Defendants or their affiliates. (Id.,
¶ 40.b.) The agreement was given to Plaintiff in English only, even though
Plaintiff alleges his native language is Italian. (Id., ¶ 41.) Defendants
Martin and Mansfield, and others continued to tell Plaintiff he could be re-hired
by Defendants and even sent him job postings at Defendants’ companies. (Id.,
¶¶ 40.b, c, 49.) In reliance on their representations, Plaintiff signed the
severance agreement. (Id., ¶ 40.e.) Defendants never re-hired Plaintiff
and failed to provide Plaintiff with access to his personnel file. (Id.,
¶¶ 47, 49.)
Based
on these allegations, the causes of action in the FAC are: (1) Rescission; (2)
Violation Of Business And Professions Code § 16600; (3) Fraud/Deceit; (4)
Discrimination In Violation Of FEHA; (5) Failure To Hire In Violation Of FEHA; (6)
Harassment In Violation Of FEAH; (7) Failure To Prevent Discrimination; (8)
Failure To Produce Personnel File In Violation Of California Labor Code §
1198.5; (9) Intentional Infliction Of Emotional Distress; (10) Negligent
Hiring, Retention, And Supervision; 11)
Wrongful Termination In Violation Of Public Policy; and, (12) Whistle-Blower
Retaliation In Violation Of Labor Code § 1102.5.
Defendants move for summary judgment, or, in the
alternative, summary adjudication of Plaintiff’s FAC. Plaintiff opposes the
motion.
The Court Strikes Parties’ Unauthorized Additional
Filings
The Court strikes the following nine documents filed
after the parties completed briefing on the motion on 12/8/2023: (1) Plaintiff’s
Request for Judicial Notice of Further Evidence, filed 1/22/2024; (2)
Supplemental Declaration of Aaron Gbewonyo in Support of Plaintiff’s Opposition,
filed 1/22/2024; (3) Plaintiff’s Procedural Objections to Defendants’ Motion
for Summary Judgment or, in the Alternative, for Summary Adjudication of Issues,
filed 1/22/2024; (4) Plaintiff’s Evidentiary Objections in Opposition to
Defendants’ Motion for Summary Judgment and Summary Adjudication of Issues,
filed 1/22/2024; (5) Defendants’ Response to Plaintiff’s Evidentiary Objections,
filed 1/26/2024; (6) Objection to Plaintiff’s Request for Judicial Notice of
Further Evidence in Support of Plaintiff’s Opposition, filed 1/26/2024; (7) Defendants’
Response to Plaintiff’s Procedural Objections, filed 1/26/2024; (8) Plaintiff’s
Further Evidentiary Objections in Opposition to Defendants’ Motion, filed
1/29/2024; (9) Plaintiff’s Further Procedural Objections to Defendants’ Motion
for Summary Judgment or, in the Alternative, for Summary Adjudication of Issues,
filed 1/29/2024.
The parties filed these unauthorized documents after the
Court specifically denied a request to file additional documents in connection
with the motion. (See 12/12/2023 Minute Order.) The Court does not
consider these unauthorized documents for purposes of this motion. Bozzi v.
Nordstrom, Inc. (2010) 186 Cal. App. 4th 755, 765 (affirming court’s
discretion to refuse to consider unauthorized “surrebuttal” briefs).
Evidentiary Objections
In ruling on a summary judgment or adjudication motion,
the Court need only rule on evidentiary objections it deems material to its disposition
of the motion. CCP §437c(q). The Court therefore
makes the following rulings on objections it deems material to its disposition
of the motion:
The Court sustains Objection No. 15 in Plaintiff’s Evidentiary
Objections (filed 11/29/2023) and overrules Plaintiff’s remaining objections.
The Court overrules Objections Nos. 10-13 in Defendants’
Objections to the Declaration of Maria Elza Tomaz (filed 12/8/2023).
The Court has considered the remaining evidentiary
objections and finds that they relate to proof that is immaterial to the ruling
on this matter.
Legal Standard
In moving for summary judgment or summary adjudication,
a “defendant . . . has met his or her burden of showing that a cause of action
has no merit if the party has shown that one or more elements of the cause of
action, even if not separately pleaded, cannot be established, or that there is
a complete defense to the cause of action.” (CCP § 437c(p)(2).)
Once the defendant has satisfied that burden, the
burden shifts to the plaintiff “to show, by responsive separate statement and
admissible evidence, that triable issues of fact exist.” Ostayan v. Serrano Reconveyance Co.
(2000) 77 Cal. App. 4th 1411, 1418, disapproved on other grounds by
Black Sky Cap., LLC v. Cobb (2019) 7 Cal. 5th 156, 165; see also CCP
§ 437c(p)(2). The plaintiff must present substantial evidence to avoid summary
judgment. Sangster v. Paetkau
(1998) 68 Cal.App.4th 151, 163.
Analysis
1.
Triable Issues of Material Fact Exist
Preclude Summary Judgment of Plaintiff’s Complaint
Defendants contend that they are entitled to summary
judgment because the severance agreement signed by Plaintiff contains a release
of the claims asserted in the FAC. While Plaintiff alleges a claim for
recission of the severance agreement under Civil Code § 1689, Defendants
contend that Plaintiff cannot, as a matter of law, establish any basis for
recission of the agreement and thus the release bars the entire Complaint.
As an initial matter, Defendants do not establish that
the release in the severance agreement applies to the individual Defendants
Martin, Mansfield, Von Engeln, or Gerhard Novak. Therefore, Defendants fail to
meet their burden of proof to show all Defendants are entitled to summary
judgment based on the release. The Court nevertheless considers the merits of
Defendants’ argument.
If the party seeking to rescind a contract had to
consent to the contract, the party may rescind if the consent was “given by
mistake, or obtained through duress, menace, fraud, or undue influence,
exercised by or with the connivance of the party as to whom he rescinds.” Civ.
Code § 1689. Thus, rescission is available “on the basis of inducement into the
agreement by the defendant’s fraudulent misrepresentation.” Star Pacific
Investments, Inc. v. Oro Hills Ranch, Inc. (1981) 121 Cal. App. 3d 447, 457.
Persons capable of reading and understanding contracts
may not avoid them based on failure to read them before signing, unless there
was fraud, coercion or excusable neglect. Brown v. FSR Brokerage, Inc. (1998)
62 Cal.App.4th 766, 777; Coon v.
Nicola (1993) 17 Cal.App.4th 1225,
1239; Bolanos v. Khalatian (1991) 231 Cal.App.3d 1586, 1590. The failure to read an agreement, because of
inability to read, or an inability to understand English, are not cognizable
grounds to avoid contracts, because parties are expected to have others read or
explain the contracts to them. Randas
v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158,
163. However, limited English fluency
and education, as to terms printed in English, adequately showed contract procedural
unconscionability. See Orcilla v. Big Sur,
Inc. (2016) 244 Cal.App.4th 982, 997.
Employers failing to translate provisions for employees,
who could not read English, constituted unconscionability. See Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226
Cal. App. 4th 74, 85 (“What elevates this case to a high degree of procedural
unconscionability … The … companies hid the enforceability clause and the
entire confidentiality subagreement by failing to translate that portion of the
agreement into Spanish.”).
Triable issues of material facts exist on the issue of
whether Defendants fraudulently induced Plaintiff into signing the severance
agreement, such that Plaintiff can obtain rescission of the severance agreement
(and thus the release provision). Specifically, triable issues exist about
whether Defendants orally represented that Plaintiff would be hirable pursuant to
the severance agreement. (Plaintiff’s Response to Sep. Stmt., MSJ UMF Nos. 5 –
10). Triable issues of fact exist about whether such statements induced
Plaintiff not to take advantage of 21 days to consider the Release and another
7 days to revoke it. (Id., Nos. 11, 13.) Arguably, cognizable disputes exist
about the extent of Plaintiff’s ability to understand English. (Id.,
Nos. 25 – 23; Plaintiff’s Add’l Material Facts Nos. 1-8.)
Defendants contend that Plaintiff cannot rely on an
oral representation made to him that is inconsistent with the severance
agreement as a basis to seek rescission. (Mot., p. 11). But the cases Defendants
rely on are distinguishable. One case involved no oral representations to
contradict the written contract. See Dore v. Arnold Worldwide, Inc.
(2006) 39 Cal.4th 384, 393-94 (“Dore conceded in his deposition that no one at
AWI specifically told him he would be employed there so long as his work was
satisfactory….”). Another opinion
distinguishably applied insurance law and insureds who accepted an agreement
without even trying to read it. See
Hadland v. NN Investors Life Ins. Co. (1994) 24 Cal.App.4th 1578,
1588-89 (“The Hadlands, having failed to
read the policy and having accepted it without objection, cannot be heard to
complain it was not what they expected. Their reliance on representations about
what they were getting for their money was unjustified as a matter of law.”). And the third cite distinguishably involved
application of insurance law with particular factual circumstances making it
unreasonable to rely on misrepresentations. See Hackethal v. National
Casualty Co. (1987) 189 Cal.App.3d 1102, 1111 (“The brochure, which Dr.
Hackethal carefully preserved with the original policy for nine years, put him
on notice that the terms of the policy controlled the extent of his coverage.”).
The Court therefore denies summary judgment.
2.
Triable Issues of Material Fact
Preclude Summary Adjudication of Plaintiff’s Claims for
Intentional Infliction of Emotional Distress and Whistleblower Retaliation, and
for Punitive Damages
Defendants
argue that, even if Plaintiff’s entire case is not barred by the release in the
severance agreement, his claims for intentional infliction of emotional distress,
whistleblower retaliation, and punitive damages fail.
a. Intentional
Infliction of Emotional Distress
Plaintiff’s
intentional infliction of emotional distress claim alleges that “Defendants’
discriminatory, harassing, and retaliatory actions” constituted extreme and outrageous
conduct and caused him emotional distress. (FAC, ¶ 134.) Defendants contend
that this claim must fail because a plaintiff cannot establish an intentional
infliction of emotional distress claim based on personnel management decisions.
Managing
personnel is not in and of itself “extreme and outrageous conduct” required to
prove an intentional infliction of emotional distress claim. Janken v. GM
Hughes Electronics (1996) 46 Cal.App.4th 55, 80. But some employment
actions can involve outrageous conduct giving rise to an intentional inflict of
emotional distress claim. E.g., Robinson
v. Hewlett-Packard Corp. (1986) 183 Cal. App. 3d 1108, 1127-30 (race
discrimination can be outrageous), disapproved
on other grounds in Rojo v.
Kliger (1990) 52 Cal. 3d 65, 81-82. And relevant here, harassment does not
include commonly necessary personnel management actions, such as hiring,
firing, job assignments, promotion, demotion, performance evaluations,
excluding from meetings, and laying off.
Thompson v. City Of Monrovia (2010) 186 Cal.App.4th 860, 879. “[H]arassment consists of conduct outside the
scope of necessary job performance, conduct presumably engaged in for personal
gratification, because of meanness or bigotry, or for other personal motives.
Harassment is not conduct of a type necessary for management of the employer's
business or performance of the supervisory employee's job.” Reno v. Baird (1998) 18 Cal.4th 640,
646. Official employment actions can evidence a harassment claim where the
action communicates a hostile or offensive message to the employee. Pollock v. Tri-Modal Distribution
Services, Inc. (2021) 11 Cal.5th 918, 932-33.
Here,
evidence exists about conduct by Defendants that goes beyond simply personnel
management. This includes Plaintiff’s claim that Defendants repeatedly made age-related
comments to him and told him that Defendants needed to hire younger employees. (Plaintiff’s
Response to Sep. Stmt., MSJ UMF No. 14; MSA UMF No. 14; Plaintiff’s Add’l Mat.
Facts Nos. 23-44.) Plaintiff also includes evidence that others who worked for
Defendants heard these comments. (Plaintiff’s Add’l Mat. Fact No. 74.) Also,
there are disputes about whether Defendants fraudulently induced the severance agreement.
(Plaintiff’s Response to Sep. Stmt., MSA UMF Nos. 5 – 13.). These triable
issues of material fact on whether Defendants’ employment actions rise to the level
of outrageous conduct preclude summary adjudication.
b. Whistleblower
Retaliation
A
claim under Labor Code Section 1102.5(B) (Whistleblowing)
is based on (1) retaliation against an employee's protected activity and (2) that
was a contributing factor for causing an adverse employment action. Lawson v. PPG Architectural Finishes, Inc. (2022)
12 Cal. 5th 703, 718. Defendants assert that Plaintiff’s complaints about untimely
payments to employees occurred far too long before he was terminated in 2019 to
reasonably infer a retaliatory motive for his termination.
The element of causation may be based upon inferences
from circumstantial evidence, including employer’s knowledge of the employee’s
protected activity, and the time between the protected act and the employment
decision. Morgan v. Regents of Univ.
of Cal. (2000) 88 Cal.App.4th 52, 69-70.
Employment termination only a few months after employees’ protected
activities can circumstantially evidence causation as to retaliation
claims. Flait v. No. Amer. Watch Corp.
(1992) 3 Cal. App. 4th 467, 478. “Although
‘temporal proximity alone is not sufficient to raise a triable issue as to
pretext,’ ‘temporal proximity, together with the other evidence, may be
sufficient to establish pretext.’ ” Diego
v. Pilgrim United Church of Christ (2014) 231 Cal. App. 4th 913, 932. To infer retaliation based upon timing,
plaintiffs must show a relatively short time passed between the protected
activity and the adverse employment action.
Loggins v. Kaiser Permanente Intern. (2007) 151 Cal.App.4th 1102, 1110 n. 6 (nine
months too long to infer retaliation). A
long period between an adverse action and the employee’s protected activity may
show the lack of causation, unless in between the employer engages in a pattern
of conduct consistent with a retaliatory intent, such as coldness or
hostility. Wysinger v. Auto. Club of So. Cal. (2007) 157 Cal.App.4th 413, 421. Employer conduct starting after an employee
complains, and persisting until the adverse employment action, could reasonably
infer causation. Green v. Laibco, LLC (2011) 192 Cal.App.4th 441, 456.
As to Plaintiff’s whistleblowing claim, there are
triable issues of material fact as to whether any of Plaintiff’s complaints
occurred after 2013 and recently enough before his termination in 2019 to infer
Defendants’ intent to retaliate. (Plaintiff’s Response to Sep. Stmnt., MSJ UMF
Nos. 26-27, MSA Nos. 4, 26-27.) Hence, the whistleblowing claim is not suitable
for summary adjudication.
c. Punitive
Damages
Defendants contend there is no clear and convincing
evidence of fraud, oppression or malice by officers, directors, or managerial
agents, as required for punitive damages.
Punitive damages are potentially available in actions
based on FEHA or violations of public policy.
Cloud v. Casey (1999) 76 Cal.App.4th 895, 912 (jury properly
found employer defendants intentionally discriminated and consciously
disregarded employee’s rights, by doing an adverse employment action based on
gender, because defendants tried to hide it with a false explanation.). “[E]vidence
showing an employee’s hierarchy and job duties, responsibilities, and authority
may be sufficient, absent conclusive proof to the contrary, to support a
reasonable inference by a trier of fact that the employee is a managing agent
of a corporation.” Davis v. Kiewit
Pacific Co. (2013) 220 Cal.App.4th 358, 370.
Triable issues of material fact exist as to whether Defendants’
managerial agents engaged in conduct beyond wrongful termination of Plaintiff.
For example, issues of fact exist as to whether Defendant Martin, the HR
Director, fraudulently induced Plaintiff to sign the severance agreement and committed
FEHA violations related to age discrimination. (Plaintiff’s Response to Sep. Stmnt.,
MSA UMF Nos. 5-14, 26-27.) Given these disputes,
the Court denies summary adjudication of Plaintiff’s claim for punitive damages.
Conclusion
The Court denies the motion for summary judgment, or,
in the alternative, summary adjudication, based on its determination that there
are triable issues of material fact as to each issue falling within the scope
of the notice and separate statement.