Judge: Barbara M. Scheper, Case: 22STCV07996, Date: 2023-10-30 Tentative Ruling
Case Number: 22STCV07996 Hearing Date: April 10, 2024 Dept: 30
Dept. 30
Calendar No.
Cornwell vs City
of Compton, et. al., Case No.
22STCV07996
Tentative Ruling
re: Defendant’s Motion for Summary
Judgment, or in the alternative, Summary Adjudication of Issues; Plaintiff’s
Motion for Summary Judgment or in the alternative, Summary Adjudication of
Issues
Defendant City of Compton (“Defendant” or “City”) moves for
summary judgment as to Plaintiff Craig Cornwell’s (“Plaintiff”) complaint. Plaintiff moves for summary judgment in his
favor. Defendant’s motion for summary
judgment is granted. Plaintiff’s motion
for summary judgment is denied
This case arises from Plaintiff’s
employment with Defendant City of Compton, originally as the City Attorney.
(Compl. ¶¶ 8-10.) Plaintiff transitioned to the role of City Manager in July
2019. (Id. ¶ 14.)
Plaintiff alleges that in February
2021, after negotiations, Plaintiff and Defendant entered into an agreement to
extend his tenure as City Manager. (Compl. ¶¶ 28-30.) However, notwithstanding
all of the representations from City Council members that the City would honor
the February 23, 2021 Employment Agreement, the City Council openly and
notoriously indicated that it was not going to honor the February 23, 2021
Employment Agreement and was going to breach the terms and conditions thereof.
(Id. ¶ 43.)
Plaintiff alleges that Defendant’s
breach of the employment agreement caused him material harm, including lost
employment opportunities, based on the assurance and representations made by
the City Council that the agreement would be honored. (Compl. ¶ 56.)
The function of a motion for
summary judgment or adjudication is to allow a determination as to whether an
opposing party can show evidentiary support for a pleading or claim and to
enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 843.) Code of Civil Procedure Section 437c, subdivision (c)
“requires the trial judge to grant summary judgment if all the evidence
submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted
by other inferences or evidence, show that there is no triable issue as to any
material fact and that the moving party is entitled to judgment as a matter of
law.” (Adler v. Manor Healthcare Corp.
(1992) 7 Cal.App.4th 1110, 1119.)
As to each claim as framed by the
complaint, the defendant moving for summary judgment must satisfy the initial
burden of proof by presenting facts to negate an essential element, or to
establish a defense. (Code Civ. Proc, § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005)
128 Cal.App.4th 1510, 1520.) Courts “liberally construe the evidence in support
of the party opposing summary judgment and resolve doubts concerning the
evidence in favor of that party.” (Dore
v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.
Once the defendant has met that
burden, the burden shifts to the plaintiff to show that a triable issue of one
or more material facts exists as to that cause of action or a defense thereto.
To establish a triable issue of material fact, the party opposing the motion
must produce substantial responsive evidence.
(Sangster v. Paetkau (1998) 68
Cal.App.4th 151, 166.)
Plaintiff’s First Cause of Action: Breach of Contract
“The standard elements of a claim
for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff
therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164
Cal.App.4th 1171, 1178.)
Defendant asserts that a contract
was never formed with Plaintiff. This argument hinges on the premise that there
was no mutual assent or meeting of the minds on all material points. Defendant
points to the presence of a counterproposal and unresolved material terms as
evidence of incomplete negotiations.
The law acknowledges that contract
formation can be inferred from the conduct and correspondence between parties,
even in the absence of a finalized document. (See Bustamante v. Intuit, Inc. (2006)
141 Cal.App.4th 199, 208 [“Where the existence of a contract is at issue and
the evidence is conflicting or admits of more than one inference, it is for the
trier of fact to determine whether the contract actually existed. But if the
material facts are certain or undisputed, the existence of a contract is a
question for the court to decide.”].)
The Court finds that the undisputed
facts demonstrate that there was no mutual assent between the parties on all
material points.
As an initial matter, the Court
notes that both parties took great pains to present evidence regarding the
formation of Plaintiff’s contract to become City Manage in July 2019. This included closed session discussion and
approval to proceed with making an offer of employment to Plaintiff; evidence
of negotiations between Plaintiff’s and the attorney for the City regarding the
terms of the agreement (Plaintiff’s Decl., ¶ 6.); presentation of the ten-page written
agreement in open session (Brown Decl. ¶ 6; Plaintiff’s Decl. ¶ 7); full
execution by Plaintiff and members of the City Council and certification by the
City Clerk. Lastly a resolution
reflecting the agreement was duly entered.
(Brown Decl. ¶ 6, Ex. 1.) All
parties to this action were keenly aware of what was required to bind the City
to an employment contract under the Brown Act and all of the requirements that were
met in connection with that agreement.
In contrast, the undisputed facts
before the Court demonstrate that not only did the parties utterly fail to
comply with the Brown Act, they had no meeting of the minds in connection with
any agreement to extend Plaintiff’s term as City Manager.
February 23, 2021 is a pivotal date
in the assessment of the evidence. This
is the date on which Plaintiff claims he was offered an extension of his
contract by the City Council in closed session, and he accepted the offer. The admissible records of the City’s actions
however are not consistent with Plaintiff’s narrative.
On February 23, 2021, the Council
met in closed session beginning at 4:39 p.m.
(Plaintiff’s RJN, Ex. 4.) The closed
session agenda included a discussion of public employment, namely the City
Manager position. It appears to the
Court that earlier that day, at 12:42, Plaintiff emailed an extension proposal for
his contract to City Attorney Damon Brown.
(Fletcher Decl. Ex. 7, Brown Decl, Ex. 3.) It appears that Brown forwarded the proposal
to council member Isaac Galvan at 6:08 p.m., while the closed session was
ongoing. (Fletcher Ex. Ex. 5.) According to the minutes from February 23,
the Council returned to open session at 7:45 p.m. Brown reported a reportable action from the
closed session related to a settlement agreement between the City and a
union. Brown did not report on any
decision regarding Plaintiff’s contract extension. In fact, in Brown’s closed session report he
wrote: “Negotiation of City Manager’s
contract for employment” as the subject of the session. As to action taken, Brown wrote: “Counteroffer terms approved. Authority granted to City Attorney to propose
counteroffer to Mr. Cornwell.” Brown
checked the box: “no reportable action.”
(Fletcher Decl., EX. 4.)
At 8:01 p.m. on February 23, Brown
emailed the City Clerk, Alita Godwin, copying Plaintiff regarding the closed
session report. Ms. Goodwin responded at
8:24 p.m. with the question: “No
reportable action on City Manager in closed session?” Plaintiff was copied on this email as
well. Brown responded saying
“Correct.” Plaintiff was copied on this
email. (Fletcher Decl. Ex. 6.)
Several days later, on February 26,
2021, Brown emailed Plaintiff and attached a copy of the City’s counter
proposal. (Fletcher Decl., Ex. 7.)
The next meeting of the City
Council was on March 16, 2021. Again,
the employment of the City Manager was on the closed session agenda. (Plaintiff’s RJN, Ex. 5.) Earlier in the day, Brown emailed to Deputy
City Attorney Ruth Rugley Plaintiff’s proposal for the contract extension and
the City’s counterproposal. (Fletcher Decl.,
Exs. 8 and 9.) In her notes regarding
the closed session that she attended, Rugley wrote that the subject of the
session was “Employment K of CM.” She
went on to write: “Per CA, CC have held
closed sessions to discuss a new (extended) employment K for CM. Appears that CC is desirous of stability in
position, so amenable to [?] current K w/ earlier term start date of 6/30/2021
(current K expires 7/7/2021) thru 12/30/24.”
Under action taken, Rugley wrote:
“CM agrees to CC counteroffer except requests 4 1/2 years & 20 hours
a/mo vacation hours. Probably no to 4 1/2
yrs, ok to 20 hours vacation.” Rugley
checked the box: “no reportable
action.” Rugley also made notes on the
City’s counterproposal. (Fletcher Decl.,
Ex. 11.)
When the Council returned to open
session, Rugley reported that no reportable action was taken during the closed
session.
During the public comment section
of the closed session agenda item, Mr. Robert Ray noted that “the City
Manager’s position has been the closed session topic of discussion for the last
4 weeks in a row, and asserted that if there is a problem with his employment,
then he should be terminated.”
The Council
next met on April 6, 2021. The closed
session agenda description is completely redacted but public comments on the
agenda items indicate that the City Manager employment agreement was again on
the agenda. City Attorney Brown reported
no reportable action was taken during the closed session. (Fletcher Decl., Ex. 18.)
At the next
meeting on June 22, 2021, during the public session, council members and City
Attorney Brown discussed language in Plaintiff’s proposed contract. (The evidence does not include a copy of any
draft contract, only the proposal by Plaintiff and counter proposal by the
City.) After discussion, a resolution
authorizing the extension of Plaintiff’s contract was voted on and failed. Plaintiff was present at this meeting but
does not mention it in his declaration but instead asserts that it was not
until the next meeting on July 6, 2021 that he learned the alleged agreement to
extend his contract would not be honored.
(Fletcher Decl, Ex. 24.)
On July 6,
2021, City Attorney Brown reported out of closed session that the City Council
had voted to extend Plaintiff’s contract by one year, approved the carryover of
personal days to the next calendar year, and increased vacation days to 20
hours per month. (Plaintiff’s RJN, Ex.
6.) Clearly, this agreement is different
from Plaintiff’s proposal as well as Defendant’s counter proposal. Plaintiff argues that the agreement reached
on February 23, was for a 3.5-year extension yet the term reported out in
public session was for just one year.
Clearly the term of the extension was a material term.
Later in
the meeting on July 6, councilmember Chambers stated that she wished to change
her vote regarding Plaintiff’s contract and called for reconsideration. On the re-vote, only one council member voted
in favor, two were opposed and one abstained.
The resolution failed.
The Court is mindful that its job
on summary judgment is simply to identify disputed issues of material fact, not
to adjudicate them. On the facts before
the Court, the Court finds as a matter of law that no contract was formed. The declarations of Plaintiff, some city
council members and Deputy City Attorney Rugley are simply inconsistent with
the contemporaneously prepared documents.
The Court does not believe that Plaintiff can create a triable issue of
fact by contradicting official documents, many of which he requested judicial
notice. The declarations of the council
members are virtually identical. None
explain why employment of the city manager continued to be a subject for closed
session if agreement had already been reached; none address the absence of a
formal employment agreement. The Court
also notes that Plaintiff apparently never raised these issues at any point
between February 23 and July 6.
The Court also finds that the
failure to comply with the Brown Act requirements is fatal to Plaintiff’s
claim. As noted above, all the
individuals involved in this process were keenly aware of what had to be done
to comply with the Brown Act. Plaintiff
argues that the Brown Act does not abrogate common law principles of contract
formation. That is true but that does
not mean that the Brown Act cannot require additional steps to create an
enforceable agreement in the context of employment contracts with municipalities.
Plaintiff cites to Government Code
Section 54960.1(d)(3) which provides that an action taken that is alleged to
have been taken in violation of Section 54953, 54954.2, 54954.5, 54954.6,
54956, or 54956.5 shall not be determined to be null and void if any of the
following conditions exist: the action
taken gave rise to a contractual obligation, including a contract let by
competitive bid other than compensation for services in the form of salary
or fees for professional services, upon which a party has, in good faith
and without notice of challenge to the validity of action, detrimentally
relied. (Emphasis added.) Clearly the highlighted language exempts
professional services contracts from this provision. Moreover, in light of Plaintiff’s background,
training and experience, Plaintiff could not have detrimentally relied on what
supposedly happened in close session only on February 23.
Plaintiff’s Second Cause of Action: Promissory Fraud
“ ‘Promissory fraud’ is a
subspecies of the action for 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.” [Citation. (quotations removed.)] ‘An action for
promissory fraud may lie where a defendant fraudulently induces the plaintiff
to enter into a contract. [Citations.] In such cases, the plaintiff's claim
does not depend upon whether the defendant’s promise is ultimately enforceable
as a contract. “If it is enforceable, the [plaintiff] ... has a cause of action
in tort as an alternative at least, and perhaps in some instances in addition
to his cause of action on the contract.” [Citations.] Recovery, however, may be
limited by the rule against double recovery of tort and contract compensatory
damages.’ [Citation.]” (Agosta v. Astor (2004) 120 Cal.App.4th 596, 603.)
Defendant argues that Plaintiff’s
promissory fraud cause of action fails on the grounds that public entities are
immune from liability for common law torts, including promissory fraud and
promissory estoppel, except as explicitly provided by statute, according to
California Government Code §§ 815 & 815.2. Defendant states that Plaintiff
fails to identify any statute that overrides this immunity for the promissory
fraud claim. Additionally, Defendant contends that Plaintiff cannot demonstrate
the essential elements of promissory fraud, particularly the requirement that
Defendant made a promise with the intent not to perform it at the time the
promise was made. The argument is supported by evidence suggesting that
negotiations were conducted in good faith, including an offer of employment
extended to the Plaintiff in July 2021, which contradicts the claim of
fraudulent intent. (UMF nos. 43-45.) Furthermore, Defendant highlights
procedural aspects, such as the lack of formal approval by the City Attorney as
required by the Compton City Charter, to argue that no valid contract or
fraudulent promise was ever established. (Id. nos. 46-47.)
Plaintiff fails to address the
promissory fraud claim in his opposition, thereby failing to rebut Defendant’s
showing that the promissory fraud claim fails as a matter of law.
Plaintiff’s Third Cause of Action: Promissory Estoppel
“The doctrine of promissory
estoppel is stated in section 90 of the Restatement of Contracts as follows: ‘A
promise which the promisor should reasonably expect to induce action or
forbearance of a definite and substantial character on the part of the promisee
and which does induce such action or forbearance is binding if injustice can be
avoided only by enforcement of the promise.’ This rule is applicable in
California.” (Hilltop Properties, Inc. v. State (1965) 233 Cal.App.2d
349, 362.)
“ ‘The very purpose of section 90
is to make a promise binding even though there was no consideration “in the
sense of something that is bargained for and given in exchange.” [Citation.]
Reasonable reliance serves to hold the offeror in lieu of the consideration
ordinarily required to make the offer binding.’ [Citation.] Promissory estoppel
is a theory of recovery which is allowed where injustice can be avoided only by
enforcement of the promise, this usually occurring where the plaintiff has made
a complete and substantial change of position in reliance upon the promise. [Citation.]”
(Hilltop Properties, Inc. v. State (1965) 233 Cal.App.2d 349, 362.)
Defendant argues that Plaintiff
fails to make a claim for promissory estoppel because there was no clear or
unambiguous promise by Defendant, there was no actual reliance by Plaintiff,
there was no reasonable and foreseeable reliance, and Plaintiff did not rely on
the alleged contract for employment to his detriment. Defendant highlights the
lack of a clear promise by pointing to the ongoing nature of negotiations and
the absence of a finalized agreement, as evidenced by session reports and the
procedural requirements that remained unmet. (See UMF nos. 45, 50.) Defendant
contests the claim of actual reliance by the Plaintiff, noting his prior
experience with municipal employment contracts and the necessity of formal
approval in an open session—a process the Plaintiff was, or should have been,
aware of, thus undermining the premise of his reliance on any informal or
preliminary promises. (UMF nos. 5, 30.) Defendant states that there is no
evidence to show that Plaintiff detrimentally relied on the agreement. Rather,
the evidence shows that Plaintiff could “not remember” ways that he was damaged
(UMF no. 55), Plaintiff did not seek other employment and declined other offers
of employment. (UMF no. 55.) Finally, Defendant states that liability is
precluded for the promissory estoppel claim under Government Code section 818
et seq., which precludes public entities from being liable for injuries caused
by employee misrepresentations.
As noted above, the Court does not
find that the evidence establishes that the City made a clear and unambiguous
promise to Plaintiff on February 23, 2021.
To the contrary, the contemporaneous written records, made by
individuals under a duty to report the proceedings accurately, reflect only
that the Council authorized the City Attorney to make a counteroffer to
Plaintiff. As demonstrated in the notes
from the next meeting in March, the agreement had not been finalized by both
parties. The fact that the City Manager
contract was repeatedly agendized for discussion in closed session also
demonstrates that a final agreement had not been reached. Finally, the minutes from the June meeting
strongly suggest that a draft agreement was circulated among the council
members and there was debate as to what language was included and what language
was removed. The resolution to approve
the agreement failed.